Academic journal article The Government Accountants Journal

Governmental Accounting for Debt: What Do Practitioners Want?

Academic journal article The Government Accountants Journal

Governmental Accounting for Debt: What Do Practitioners Want?

Article excerpt

Accountants who have followed the sweeping changes, both proposed and adopted, in governmental financial reporting in the last decade can attest to a greatly changing landscape. The creation of the Governmental Accounting Standards Board (GASB) has been a major impetus for change with the focus being the improved usefulness of financial information. Significant changes in financial reporting include a variety of pronouncements ranging from the newly issued Exposure Draft on concepts related to Service Efforts and Accomplishment Reporting to the controversial standard that would totally revise the governmental accounting model [GASB Statement 11: Measurement Focus and Basis of Accounting --Governmental Fund Operating Statements]. Implementing GASB Statement 11 would significantly change governmental accounting by requiring that the accounting model be based on the accrual basis of accounting and that the measurement focus would follow the flow of financial resources.(1) The measurement focus is supported by the concept of accountability, which includes measuring interperiod equity.(2) However, the implementation of GASB 11 has been delayed, based on GASB Statement 17 which defers the effective date of GASB Statement 11 for two years after a new implementation standard is issued.

We believe that GASB Statement 11, when implemented, will significantly change current governmental financial reporting, however, there were many critical issues that were not addressed in the Statement or were only tentatively addressed. These issues will supposedly be resolved when the GASB issues future statements.

A review of GASB Statement 11 suggests major weaknesses or omissions in the area of capital debt issues. Our research project developed a questionnaire related to those issues and the questionnaire was sent to government accountants to obtain their insight. Hopefully, the opinions provided in this study will identify constituents' needs and provide practitioners with a better understanding of the capital debt issues related to the implementation of GASB Statement 11.


To obtain views on certain capital debt issues, a national survey of individuals that are involved with governmental financial reporting was conducted. The Association of Government Accountants (AGA) sponsored this project and allowed their members to serve as the basis for the survey. The 12,000 members of AGA consists of various users, preparers and attestors, enabling the survey to draw opinions from a diverse group of government accountants (a copy of the survey instrument is available upon request from the authors).

The questionnaire included two major sections. The first section requested demographic information about the respondents, while the second section contained seven specific questions about capital debt issues.

After pretesting the questionnaire and further revision, the questionnaire was mailed to 560 AGA members. The survey response rate is shown in Table 1.(Table 1 omitted) The response rate of 28.4% shows that the questions were of interest to these accountants.(3) Our survey results are presented showing comparisons between users and the preparer/attestor groupings.


To help in the interpretations of the findings, we gathered data on selected demographic variables. Information was obtained on experience and professional certification, knowledge of GASB accounting standards and usage of governmental financial reports.

Experience and certification. Table 2 shows that all respondents to our survey had, on average, 15 years of experience in governmental entities. Forty-seven percent (47%) of all respondents hold a CPA license, with a fairly equal distribution between both sub-groups [preparers/attestors and management users].(Table 2 omitted) Both these factors show a sophisticated group of practitioners who should possess significant knowledge about governmental accounting. …

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