MD&A Amendments

FASAB Contact: Robin Gilliam,, 202-512-7356

Project Objective

The Management’s Discussion and Analysis (MD&A) Amendments project combines efforts from the Reporting Model Phase I: MD&A and Stewardship Investments Improvements and Risk Reporting projects to provide updated standards for preparing MD&A in one concise document.

Currently, most of the standards-based language for developing MD&A resides in Statement of Federal Financial Accounting Concepts (SFFAC) 3, Management’s Discussion and Analysis, rather than in Statement of Federal Financial Accounting Standards (SFFAS) 15, Management’s Discussions and Analysis.

Most of the standards-based language is included in SFFAC 3 and not SFFAS 15 due to the following history:

The Board originally worked on MD&A during the window in which it was seeking generally acceptable accounting principles (GAAP) recognition from the American Institute of CPAs (AICPA). As a result, SFFAC 3 was written more like an SFFAS to holistically describe MD&A even though it was exposed as a concepts statement.

During the exposure draft response period, the audit and preparer community said to achieve a GAAP-based statement that always included MD&A, the Board must create standards that required it. The Board, therefore, quickly used the MD&A outline from SFFAC 3 and proposed SFFAS 15 as required supplementary information.

As a result, the guidance in SFFAC 3 is not concepts-based but standards-based and should be read with SFFAS 15 by preparers to understand what to include in MD&A. However, most preparers only rely on SFFAS 15—which is very limited.

The primary objectives of this project are to:

  1. incorporate standards-based language from SFFAC 3 into SFFAS 15 to provide a standalone SFFAS for preparing MD&A;
  2. update forward looking information to include risk reporting standards as guidance for discussing how resources will be used efficiently and effectively in achieving performance goals for the reporting entity as a whole and any mission-related programs, functions, and/or activities;
  3. explain what information to analyze and discuss about the reporting objectives to achieve a financial focus; and
  4. reduce preparer burden by streamlining MD&A to focus on material changes to amounts in financial statements and supplemental information resulting from management of operating performance for the reporting entity as a whole and any mission-related programs, functions, and/or activities.