GASB has proposed its Exposure Draft which would improve the financial reporting model. The proposal includes changes to MD&A, extraordinary items, presentation of proprietary funds, and implements the short-term financial resource measurement focus for governmental funds which was introduced in an ED earlier this month. Comments are due February 26, 2021.
GASB has issued a preliminary views document which is their second phase in updating revenue and expense guidance. Building on the ITC issued in 2018, the PV continues to develop the model for categorization, recognition, and measurement. In lieu of the 3 methods proposed in the ITC, GASB has developed a Category A / Category B. For those familiar with the FASB guidance in Topic 606, the introduction of performance obligations for Category A should feel somewhat similar. Due to the scope of the project, COVID19 and upcoming fiscal year ends for many governments, comments are not due until February 2021.
GASB has proposed major changes to the concept statements for recognition. The proposal further develops the concept of the short term financial resources measurement focus. It makes changes to these concepts from the prior preliminary views document. Comments are due February 26, 2021.
This week we review the standards issued and proposed in the second quarter of 2020 for GASB, FASB, and the AICPA. While it was a slower quarter, GASB did manage to finalize quite a few final standards while also issuing exposure drafts for the conceptual framework and a preliminary views document on revenue and expenses. FASB focused solely on COVID19. The AICPA addressed COVID19, as well, while also issuing the final standard in their reporting suite and four TQAs.
This week found our regulatory agencies working hard to address COVID-19. OMB expanded its administrative relief to entities impacted operationally by current conditions. The AICPA provided guidance on how to audit inventory when you can’t be on site. The SEC provided disclosure guidance to address COVID. GASB has indicated potential delays of two major standards in response to operational issues. FASB has worked with the federal agencies to address loan modifications and TDRs in light of banks helping customers dealing with COVID fallout. Standard setting may be on hold while they all take the time to address the current situation.