Direct Loans and Loan Guarantees Disclosures

For questions about this project, email directloans@fasab.gov.

Project Objective

FASAB issued SFFAS 2, Accounting for Direct Loans and Loan Guarantees, in 1993 and since then this Statement has been amended by SFFAS 18, Amendments to Accounting Standards For Direct Loans and Loan Guarantees in SFFAS No. 2, and SFFAS 19, Technical Amendments to Accounting Standards For Direct Loans and Loan Guarantees in SFFAS 2. Federal reporting entities’ direct loan and loan guarantees note disclosures as required by GAAP have become very lengthy with numerous schedules and narratives spanning many pages.

As part of FASAB’s overall reexamination of existing standards, the Board will consider ways to improve, clarify, and streamline required note disclosures and reduce preparer burden regarding loan note disclosures.

History of Board Deliberations

April 29-30, 2026

At the April 2026 meeting, staff provided the Board with an update on the project research and outreach efforts in 2025. Staff gave an overview of feedback received from the following users:

  • Congressional stakeholders
  • Auditors
  • Federal entity preparers
  • Government Accountability Office
  • Office of Management and Budget

Staff then discussed the feedback received from the loan disclosure task force on disclosure requirements that produced the most burden.

The Board then discussed alternatives presented to reduce stakeholder burden and improve the loan disclosure. The Board’s consensus is to explore a hybrid approach that reduces the loan disclosure requirements in basic information by combining elimination and relocation to required supplementary information. The Board is also interested in improving the narrative portions of the loan disclosure to provide more meaningfulness to users. Staff’s next steps are additional research and analysis of the disclosure requirements that are candidates for potential change.

Briefing Materials – Topic F

June 17-18, 2025

At the June 2025 meeting, staff presented an education session on credit reform and loan note disclosures. The objective of the education session was to expand the Board’s knowledge base regarding credit reform before deliberations begin on the loan disclosure project. The education session included presentations from the following subject matter experts in federal credit reform:

  • Ms. Sarah Cunningham, partner at Summit, discussed ways she believes credit reform and loan note disclosures can be improved for stakeholders from a user and preparer perspective. Ms. Cunningham shared the challenges federal credit agencies are facing and several specific suggestions where the loan note disclosure can be improved and streamlined.
  • Ms. Deborah Lucas, Sloan Distinguished Professor of Finance at the MIT Sloan School of Management, presented the case for reforming credit reform by using fair value measurements. Ms. Lucas discussed the pros and cons of using fair value versus present value and the feasibility of implementing the fair value approach.
  • Ms. Courtney Timberlake, consultant at TFC Consulting, presented to the Board additional context and history of the Fair Credit Reform Act and presented her thoughts on present value and fair value measurement. Ms. Timberlake also discussed ways she believes the loan note disclosure can be improved for all stakeholders.

The Board found the education session informative and asked several questions to the panelists, focusing on the informational needs of loan note users and ways the disclosure can be streamlined and improved.

Staff will continue its research efforts and work with the loan disclosure task force.

Briefing Materials – Topic D

February 25-26, 2025

At the February 2025 meeting, staff presented the project plan for the direct loans and loan guarantees disclosures project. During the presentation, staff discussed the purpose, objectives, relevant concepts and standards, timeline, and resources needed to accomplish this project. Staff also discussed potential project management concerns with the Board.

The Board unanimously supported the project plan and the direction of the project. The Board provided comments and feedback on potential improvements to the project plan and the project’s overall direction. The Board also expressed an interest in credit reform educational sessions before beginning deliberations on the loan disclosure project.

Staff will continue its research and outreach efforts. Staff will also begin to form a credit reform disclosure task force.

Briefing Materials – Topic F