AAPC Project Related to SFFAS 55, Amending Inter-entity Cost Provisions

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
Rescission of Technical Release 8 (PDF)	October 5, 2018	Word Version of Questions for Respondents (Download)	Comment Letters	Rescission of Technical Release 8 (PDF)

Project Objective

Statement of Federal Financial Accounting Standards (SFFAS) 55, Amending Inter-entity Cost Provisions, amended SFFAS 4, Managerial Cost Accounting Standards and Concepts, and rescinded SFFAS 30, Inter-Entity Cost Implementation: Amending SFFAS 4, Managerial Cost Accounting Standards and Concepts, and Interpretation 6, Accounting for Imputed Intra-departmental Costs: An Interpretation of SFFAS No. 4.

SFFAS 4, as amended, provides for the continued recognition of significant inter-entity costs by business-type activities. Although recognition of inter-entity costs by activities that are not business-type activities is not required with the exception of inter-entity costs for personnel benefits and the Treasury Judgment Fund settlements, non-business-type activities may elect to recognize imputed cost and corresponding imputed financing for other types of inter-entity costs.

The purpose of Technical Release (TR) 8, Clarification of Standards Relating to Inter-Entity Costs, was to provide guidance in response to SFFAS 30 implementation issues related to inter-entity cost.

The project’s goal was to update TR 8 to ensure clear guidance going forward. After carefully considering if any guidance should be maintained, it was determined that TR 8 should be rescinded in its entirety because it is no longer consistent with SFFAS 4, as amended.

HISTORY OF ACTIVITY

August 16, 2018

Federal Accounting Standards Advisory Board (FASAB) staff presented a draft Technical Release (TR) that would rescind TR 8, Clarification of Standards Relating to Inter-Entity Costs, because it is no longer consistent with Statement of Federal Financial Accounting Standards (SFFAS) 4, Managerial Cost Accounting Standards and Concepts, as amended. The draft TR was proposed to update technical guidance for SFFAS 55, Amending Inter-entity Cost Provisions.

SFFAS 55 amended SFFAS 4 and rescinded SFFAS 30, Inter-Entity Cost Implementation: Amending SFFAS 4, Managerial Cost Accounting Standards and Concepts, and Interpretation 6, Accounting for Imputed Intra-departmental Costs: An Interpretation of SFFAS No. 4.

As a result, TR 8 is no longer consistent with SFFAS 4, as amended, because the requirement to recognize inter-entity costs was revised significantly.

During the August Accounting and Auditing Policy Committee (AAPC or “the Committee”) meeting, the Committee approved the TR exposure draft (ED), Rescinding Technical Release 8, for release. The ED was released on August 21, 2018, with comments requested by October 5, 2018.