Academic journal article Journal of Accountancy

GASB Overhauls Reporting Model

Academic journal article Journal of Accountancy

GASB Overhauls Reporting Model

Article excerpt

GASB OVERHAULS REPORTING MODEL

After a decade of debate, GASB has rewritten the rules for accounting for public entities. In June, the board voted unanimously to implement the dual-perspective reporting model that will change fundamentally the way state and local governments report financial information.

"Right now government financial reports focus on the funds of government," said GASB Chairman Tom L. Allen. Financial reports prepared under the new system will improve the financial information on major funds and provide financial data from a "total government" perspective.

The new standard will give a government's citizens and investors a clearer picture of its financial health. GASB said that under the new rules a government's financial statements will link all the resources available with the services provided, thus showing taxpayers how their dollars are being spent.

For the first time, governments will be required to produce financial information on their infrastructure assets such as bridges, highways and water lines. They will have to estimate the value of infrastructure built over the last 25 years and to report depreciation on those assets on a yearly basis.

"The model will revolutionize reporting by governments," said Timothy J. Green, chairman of the AICPA government accounting and auditing committee, and it will change the content and format of the statements governments are required to provide.

"There will be two sets of financial statements within the basic statements," explained Green. …

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