Government Accounting


GOVERNMENT ACCOUNTING
The Federal Accounting Standards Advisory Board (FASAB) is seeking comment on a proposal to change when a liability and corresponding expense are recognized for benefits under Social Security, Medicare and other federal social insurance programs. Currently, under Statement of Federal Financial Accounting Standard (SFFAS) no. 17, recognition occurs when a program participant meets all eligibility requirements and benefit payments become due and payable. Three FASAB members favor retaining that standard, while six others, including Chairman David Mosso, would recognize a liability and expense when participants become fully insured—for Social Security and Medicare, after 40 quarters of covered employment. One member abstained from expressing his views but supported releasing the document for comment. A preliminary views document analyzing the two positions is titled Accounting for Social Insurance, Revised. The document is available at www.fasab.gov/exposure.html . The deadline for comments is April 16, 2007.

GASB has published the 2006–2007 edition of its Comprehensive Implementation Guide. Besides consolidating and updating previous guides, the new edition includes first-time implementation guides to GASB Statements no. 44, Economic Condition Reporting: The Statistical Section—an amendment of NCGA Statement 1; no. 43, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans and no. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions. It is available at www.gasb.org or by calling 800-748-0659.

FASAB issued a Statement of Federal Financial Accounting Standards (SFFAS) to clarify and standardize reporting of fiduciary activities by federal entities over nonfederal assets. The board approved SFFAS no. 31, Accounting for Fiduciary Activities ( www.fasab.gov/pdffiles/sffas_31.pdf ), in April 2006.

Previously, fiduciary activities—in which the federal government receives and manages cash or other assets on behalf of a nonfederal individual or entity—weren’t clearly defined or distinguished from federal program activities, FASAB Chairman David Mosso said. SFFAS no. 31 takes effect September 30, 2008.

To help standardize how governments designate funds and report fund balances, GASB issued for comment Fund Balance Reporting and Governmental Fund Type Definition ( http://www.gasb.org/exp/ITC_Fund_Balance_Reporting.pdf ). The document proposes to redefine government fund types to clarify their purposes and suggests three alternative models for classifying components of fund balances. Comments can be made at www.gasb.org/survey/cgi-bin/fbr.html by January 31, 2007.

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