FASAB Amends Standards for Federal Loans and Loan Guarantees
In May, the Federal Accounting Standards Advisory Board issued two pronouncements dealing with federal agency loans and loan guarantees.
The intention of Statement of Federal Financial Accounting Standards no. 18, Amendments to Accounting Standards for Direct Loans and Loan Guarantees, is to improve financial reporting for subsidy costs and performance of federal credit programs. The new standard, which pertains to loans and guarantees from U.S. agencies such as the Small Business Administration and the Department of Education, applies when a federal agency provides a loan for a student or the SBA guarantees a loan for an individual.
Statement no. 18, which amends Statement no. 2, Accounting for Direct Loans and Loan Guarantees, becomes effective after September 30, 2000. (For the text of the document, see Official Releases, JofA, June00, page 112.)
FASAB’s second issuance, an exposure draft, requires program-by-program reconciliation for major credit programs to help identify each program’s performance. The ED refines Statement no. 18’s mandate for displaying such reconciliation on a reporting entity’s balance sheet. Titled Credit Program Reconciliation and Technical Amendments to Accounting Standards for Direct Loans and Loan Guarantees in SFFAS No. 2 and No. 18, the ED includes questions on which FASAB particularly wants respondent feedback. The comment deadline for the ED is August 10, 2000. Further details are available on the Web site at www.financenet.gov/fasab.htm .
The AICPA governing council last fall named FASAB as the accounting standard-setting body for the federal government, raising it to the level of FASB and GASB (see “AICPA Recognizes FASAB as GAAP Standard Setter,” JofA, Mar.00, page 24).