Stewardship Investments

Project Objective:

SFFAS 8 requires reporting of Stewardship Investments, which includes Nonfederal Physical Property, Human Capital, and Research and Development. As described in SFFAS 8, required supplementary stewardship information (RSSI) is a category created by FASAB as a response to the unique aspects of the Federal accounting and reporting environment, and to the broad objectives of Federal financial reporting. It was intended to permit flexibility on the part of preparers and auditors that would facilitate reporting relevant, reliable information, including non-financial and non-historical information.

The audit status of RSSI was not designated and the Board found that in many cases, the word “supplementary” in the RSSI title caused certain readers to assume that the information was of secondary importance. Since this was contrary to its intentions, the Board decided to eliminate the RSSI category and re-categorize the stewardship elements within the traditional reporting model and within categories that are well defined in existing professional literature and familiar to report users. Avoiding the use of the RSSI category will eliminate some potential confusion and ambiguity. (If this effort leads to reclassification of all items in the RSSI category, the Board will ultimately eliminate the category.)

This particular project addresses the appropriate categorization of the final stewardship category–Stewardship Investments, which includes Nonfederal Physical Property, Human Capital, and Research and Development. Specifically, the Board will assess whether the information reported for each element of Stewardship Investments should be reclassified as basic information (which includes the principal financial statements and associated notes) or required supplementary information (RSI). There is also the option that perhaps the Board may determine that certain information may no longer be required and should be eliminated.


UPDATE: Further work on this project has been postponed and will be considered during the Board’s next agenda setting session.
May 4-5, 2005 Board Meeting
The Stewardship Investments Project was introduced at the May 2005 Board meeting. The Stewardship Investments Project relates to the reclassification of Stewardship Investments information (which includes Nonfederal Physical Property, Human Capital, and Research and Development) that is now currently classified as RSSI. The project evolved as part of the Board’s overall project of reviewing and reclassifying the stewardship information to fit the categories within the traditional reporting model.

Several Board members believed that eliminating the information should be considered an option in the project because they believed the information was being reported for other requirements and may not be as useful as originally intended. However, other Board members were concerned with reversing the action of any Board without due process and deliberation.

The Board noted that the stewardship investment information ties closely with the stewardship objective as this information is intended to provide information about the productive capacity and the long-term benefit of these costs. The Board decided to maintain the stewardship investment information until the Board has an opportunity to look at that objective in detail and make decisions at that point. Therefore, the Stewardship Investments Project has been placed on hold until the Board considers the stewardship objective in the Concepts project.

Issue Paper for May 2005