The Federal Accounting Standards Advisory Board (FASAB) issued a proposal Thursday that would amend requirements for a reconciliation between budgetary and financial accounting information established by Statement of Federal Financial Accounting Standards No. 7, Accounting for Revenue and Other Financing Sources and Concepts for Reconciling Budgetary and Financial Accounting.
FASAB is seeking comment on an exposure draft of the proposal, titled Budget and Accrual Reconciliation. The proposal would replace the current reconciliation with a new budget and accrual reconciliation and explain the relationship between the entity’s net outlays on a budgetary basis and the net cost of operations during the reporting period, according to a FASAB news release.
Because it focuses the reconciliation on the net outlays instead of the obligations incurred, the new budget and accrual reconciliation would do the following, according to FASAB:
- Enhance the understandability of the relationship between budgetary resources and the costs of program operations;
- Simplify the agency’s budgetary and financial accounting reconciliation; and
- Improve the financial reporting.
“This new reconciliation would provide more valuable information to users while enhancing the support to the governmentwide accounting reporting that reconciles net operating cost to the budget deficit,” FASAB Chairman Scott Showalter said in the news release.
—Jeff Drew (email@example.com) is a JofA senior editor.