Risk Assumed – Phase II

FASAB Contact:
Robin Gilliam


(202) 512-7356

Project Objective: 

The issuance of Statement of Federal Financial Accounting Standards (SFFAS) 51, Insurance Programs, on January 18, 2017, effectively concluded the first phase of risk assumed. For the history of the risk assumed project and milestones for phase I, please see http://www.fasab.gov/ra-insurance-programs/.

In phase II, the Board will holistically review significant risk events other than adverse events covered by SFFAS 51, Insurance Programs, to determine accounting standards that provide concise, meaningful, and transparent information regarding the potential impact to the fiscal health of the federal government.


December 19-20, 2016

At the December 20, 2016, Board meeting, the Board approved a framework for the risk assumed gap analysis. Members agreed that categories should not be a laundry list of events but instead should be principle-based and broad enough to encompass current and future significant risk events. The scope will include past and future events and whether uncertainty is adequately explained. Staff will review past financial reports to understand what was included before and after recent large events, such as the 2008 financial crisis, at the agency and government-wide levels.

Staff will utilize roundtable discussions to discover if current disclosures are clear, relevant, and add value in relation to the available standards. If roundtable participants do not feel that current disclosures are clear, relevant, or valuable, the group will discuss what is missing and should be included.

Staff will work on the gap analysis over the next several months and present findings and recommendations to the Board upon completion.

Issue Paper for December 2016 – Tab G (PDF)

October 19-20, 2016 Board Meeting

At the October 19, 2016, Board meeting, the risk assumed – phase II began.

The Board reviewed staff’s high-level gap analysis presented in table 1: Analysis of Federal Accounting Standards in Relation to the IMF [International Monetary Fund] Recommendations for Disclosing Fiscal Risks and table 2 from the Australian Statement 8: Statement of Risks.

The Board agreed that an extensive gap analysis is necessary to determine the risk information that the consolidated financial report of the U.S. Government includes and how it is presented, the extent to which FASAB can align with enterprise risk management[1] (ERM), and the Board’s preference for presenting risk assumed information going forward.

For the gap analysis, the Board agreed to determine the following:

  • If federal government reporting is transparent enough for estimates and uncertainty around significant risks with a focus on broad risk categories, such as an economic downturn where revenues go down and benefit program costs go up
  • If there is a significant gap in reporting to be addressed for individual risk items, such as treaties, commitments by the federal government, and inter-governmental dependencies with state and local governments
  • How to present summarized risk events at the government-wide level for cross-cutting agency efforts, such as disaster relief, with access to detail at the agency level

In relation to FASAB aligning with the ERM effort, the Board recognizes that agencies are in different phases of development and implementation of ERM. The Board understands that ERM is not a CFO finance-focused project, but there are questions about who is doing the risk assumed project for the whole government. Therefore, FASAB appreciates agencies’ efforts and their willingness to share their progress to determine if FASAB’s risk assumed project can align with ERM.

In conclusion, staff will develop a gap analysis for discussion over a number of future Board meetings to determine how to present risk assumed information going forward.

Issue Paper for October 2016 – Tab 2

[1]The Office of Management and Budget Circular A-123, Management’s Responsibility for Enterprise Risk Management and Internal Control