Academic journal article Journal of Accountancy

FASAB Gives Guidance to Preparers of Federal Entities' Financial Reports

Academic journal article Journal of Accountancy

FASAB Gives Guidance to Preparers of Federal Entities' Financial Reports

Article excerpt

The Federal Accounting Standards Advisory Board (FASAB) issued an exposure draft of Statement of Recommended Accounting and Reporting Concepts no. 2, Entity and Display, which specifies the type of federal government entities for which financial reports should be prepared and provides guidance on the information that should be included in such reports.

The ED establishes guidelines for defining the makeup of the various types of reporting entities and identifies types of financial reports for each, suggesting the kind of information they need to include. It also presents sample formats for financial statements.

To help identify the components that should be included as part of a reporting entity, the ED offers a number of criteria. For example, any organization, program or budget account included in the federal budget section, "Federal Programs by Agency and Account," should be considered part of the government as well as part of the organization or program with which it appears, according to the ED.

The ED also says a reporting entity's financial reports should include amounts attributable to its activities, even though they are recorded elsewhere. This is particularly important for costs associated with the use of human resources as well as for costs of services provided by other reporting entities, such as computer services provided by another unit.

According to the FASAB, the guidelines may be used by all organizations within the executive branch, including cabinet-level departments, independent agencies (which report directly to the president), commissions and corporations that prepare general purpose financial reports. …

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