Evaluation of Existing Standards

FASAB Contact: Melissa Batchelor, Assistant Director, batchelorm@fasab.gov, 202-512-5976

Request for Comment Due Date Word Version of questions for Respondents Comment Letters Final Pronouncements
Assigning Assets to Component Reporting Entities (PDF) October 13, 2017 Word Version of Questions for Respondents (Download) Comment Letters Assigning Assets to Component Reporting Entities (PDF)
Intragovernmental Exchange Transactions (PDF) September 29, 2017 Word Version of Questions for Respondents (Download) Comment Letters Intragovernmental Exchange Transactions (PDF)
Amending Inter-entity Cost Provisions (PDF) November 30, 2017 Word Version of Questions for Respondents (Download) Comment Letters N/A – Currently Under Due Process

Project Objective:

Because of competing demands in the federal financial management community, some believe existing requirements should be evaluated and any unnecessary requirements eliminated. When appropriate, the Board explores opportunities for burden reduction by considering feedback from the community on changes to existing standards and areas where clarification may be needed to existing standards.

The goal is to be responsive to requests for guidance, especially for requests that meet the above purpose and benefits clearly exceed costs. Requests that clarify existing standards and changes to existing standards that reduce taxpayer burden without negative consequences will fulfill objectives. To accomplish these goals, ongoing efforts may include providing additional forums for preparers, auditors, and users to identify requirements they believe are unnecessary (this could be done through an open-ended written request for input or roundtable discussions). All requests should be assessed against the reporting objectives. Requests may be addressed through the appropriate level of GAAP guidance.

Specific areas to be considered initially:

  • Imputed cost – Amending SFFAS 4 to rescind the existing requirement to impute costs that are under reimbursed (inter-entity costs) except for business-type activities.
  • Intragovernmental Exchange Transactions – Guidance to aid in classifying certain transactions between government agencies as transfers (recognized on the statement of changes in net position) or as revenue/expense (recognized on the statement of net cost).
  • Assigning assets – Assets may be owned by one component of a large department but used and/or funded by another component. There is presently no authoritative guidance to aid management in deciding which component should report each asset.
  • Assigning liabilities – Liabilities arising from government-related events may be caused by one component of a large department but paid for by another component. There is presently no authoritative guidance to aid management in deciding which component should report each liability.

HISTORY OF BOARD DELIBERATIONS


August 30-31, 2017

A new project was added to accommodate requests for guidance, especially when benefits clearly exceed costs. When appropriate, the Board explores opportunities for burden reduction by considering feedback from the community on changes and clarification to existing standards and areas.

Amending Inter-entity Cost Provisions

SFFAS 4, Managerial Cost Accounting Standards and Concepts, and Interpretation 6, Accounting for Imputed Intra-departmental Costs: An Interpretation of SFFAS No. 4, require reporting entities to recognize the full costs of services received from other federal reporting entities, even if there is no requirement to reimburse the providing reporting entity for the full cost of such services. Consideration of the implementation challenges faced by the Department of Defense (DoD) and the experiences of other federal reporting entities led FASAB to reconsider certain inter-entity cost provisions for all federal reporting entities.

The Board approved an ED at the August 2017 meeting, and the proposed SFFAS entitled Amending Inter-entity Cost Provisions was released. This Statement would revise SFFAS 4 to provide for recognition of inter-entity costs by business-type activities and rescind the following:

  • SFFAS 30, Inter-entity Cost Implementation: Amending SFFAS 4, Managerial Cost Accounting Standards and Concepts
  • Interpretation 6, Accounting for Imputed Intra-departmental Costs: An Interpretation of SFFAS No. 4

The Board requests comments on the ED by November 30, 2017.

Assigning Assets to Component Reporting Entities

Assets may be owned by one component of a larger reporting entity, such as a department, but used and/or funded by another component of the same entity. Individual standards addressing asset recognition and related reporting do not provide detailed guidance to resolve the question of which component reporting entity should report an asset. This is especially challenging for large, complex departments, such as DoD, that have numerous components and sub-components.

A proposed Technical Bulletin (TB), entitled Assigning Assets to Component Reporting Entities, was released for comments. The TB would provide that assets may be assigned by a reporting entity to its component reporting entities on a rational and consistent basis. For example, an asset would be assigned to the component reporting entity holding legal title, funding the asset, using the asset in its operations, or on another rational and consistent basis. There should be a process in place to ensure all assets within a reporting entity are assigned to a component reporting entity.

Comments are requested by October 13, 2017.

Intragovernmental Exchange Transactions

A proposed TB, entitled Intragovernmental Exchange Transactions, was released for comment on September 5, 2017. Comments were requested by September 29, 2017. The TB would provide guidance for determining when an intragovernmental transaction is an exchange transaction.

Issue Papers for August 30-31, 2017 – Tab B1, B2, and G (PDF)