A new technical release issued by the Accounting and Auditing Policy Committee (AAPC) of the Federal Accounting Standards Advisory Board (FASAB) on Monday provides guidance to federal government agencies that apply alternative methods in establishing opening balances for general property, plant, and equipment.
Such alternative methods are permitted under Statement of Federal Financial Accounting Standards (SFFAS) 50, Establishing Opening Balances for General Property, Plant, and Equipment.
Federal Financial Accounting Technical Release (TR) 18, Implementation Guidance for Establishing Opening Balances, was issued Monday and explains the alternative valuation methods in detail. TR 18 also provides examples of the acceptable types of documentation that may support the valuation as outlined in SFFAS 6, Accounting for Property, Plant, and Equipment, as amended.
The technical release does not provide guidance on the validation of the existence and completeness of general property, plant, and equipment.
The AAPC serves as a permanent committee established by FASAB, which develops accounting standards for federal agencies’ financial reporting.
“The alternative methods provided in SFFAS 50 are meant to be less costly options to implement generally accepted accounting principles when establishing opening balances for general PP&E,” Wendy Payne, the chairperson of the AAPC and the executive director of FASAB, said in a news release. “TR 18 provides the practical guidance needed to implement the alternative methods.”
—Ken Tysiac (Kenneth.Tysiac@aicpa-cima.com) is a JofA editorial director.