Defense request spurs FASAB proposal

The board seeks less costly alternatives to opening balances for PP&E.

A proposal by the Federal Accounting Standards Advisory Board (FASAB) would permit federal government reporting entities to apply alternative methods in establishing opening balances for general property, plant, and equipment (PP&E).

The proposal was prompted by a Department of Defense request for guidance on establishing opening balances for general PP&E. The board is seeking less costly alternatives to current practice, FASAB Chairman Tom Allen said in a news release.

The alternative methods would include:

  • Use of deemed cost to establish opening balances of general PP&E.
  • Selecting between deemed cost and prospective capitalization of internal-use software.
  • Exclusion of land from opening balances with disclosure of acreage information.

The alternatives would be available only when presenting information using GAAP for the first time, or after a period during which existing systems could not provide the information necessary for producing such GAAP-based financial statements without use of the alternative valuation method. The application of this proposal under the second condition would be available to reporting entities just once per line item addressed in the proposal.

The comment period ended Feb. 4.

SPONSORED REPORT

6 key areas of change for accountants and auditors

New accounting standards on revenue recognition, leases, and credit losses present implementation challenges. This independently-written report identifies the hurdles that accounting professionals face and provides tips for overcoming the challenges.

PODCAST

How tax reform will impact individual taxpayers

Amy Wang, a CPA who is a senior technical manager for tax advocacy at the AICPA, answers to some of the most common questions on how the new tax reform law will impact individual taxpayers.