Proposed federal standard designed to protect classified information

A new proposed accounting standard for federal government agencies is designed to protect national security information and activities from unauthorized disclosure in a publicly issued General Purpose Federal Financial Report.

The Federal Accounting Standards Advisory Board (FASAB) on Friday issued an exposure draft, Classified Activities, that represents the first step in balancing the need for financial reports to be publicly available with the need to protect classified information from public disclosure.

Under the proposal, component reporting entities would be permitted to include limited modifications in a General Purpose Federal Financial Report as necessary to protect classified information from disclosure. The intent is to allow financial presentation and disclosure to appropriately meet end-user needs without impeding national security.

“The board believes this proposal allows federal entities to issue unclassified, public financial statements that comply with generally accepted accounting principles and at the same time protects classified information,” FASAB Chairman Scott Showalter said in a news release.

Comments may be submitted by March 16, 2018, at the FASAB website.

—Ken Tysiac (Kenneth.Tysiac@aicpa-cima.com) is a JofA editorial director.