1 FASAB – Coming of Age The Federal Accounting Standards Advisory Board Tom Allen, CPA Wendy Comes, CPA

2 Disclaimer Views expressed are those of the speaker. The Board expresses its views in official publications.

3 Recent Issuances Becoming Effective Trust Funds:Trust Funds: –Earmarked Funds –Fiduciary Funds Technical Bulletin - AsbestosTechnical Bulletin - Asbestos

4 Implementation Guidance for Standards in Development Stewardship Land & Heritage AssetsStewardship Land & Heritage Assets Inter-Entity CostsInter-Entity Costs NASA – Theme AssetsNASA – Theme Assets Interpretation – Remanufactured ItemsInterpretation – Remanufactured Items

5 Status of Major Projects Conceptual FrameworkConceptual Framework –Objectives –Elements Social Insurance and Research on Other LiabilitiesSocial Insurance and Research on Other Liabilities Natural ResourcesNatural Resources

6 Conceptual Framework Phases Objectives and qualitative characteristicsObjectives and qualitative characteristics Elements and Recognition CriteriaElements and Recognition Criteria Financial Reporting Model and Sustainability ReportingFinancial Reporting Model and Sustainability Reporting Measurement AttributesMeasurement Attributes EntityEntity

7 Objectives RoundtablesRoundtables Strategic Planning & White PaperStrategic Planning & White Paper –Defining the Board’s role and priorities in meeting the broad objectives of SFFAC 1

8 Roundtable Meetings - Objectives of Federal Financial Reporting Objective 1 – Budgetary IntegrityObjective 1 – Budgetary Integrity Objective 2 – Operating PerformanceObjective 2 – Operating Performance

9 Reporting Objectives - continued Objective 3 – StewardshipObjective 3 – Stewardship Objective 4 – Systems and ControlObjective 4 – Systems and Control

10 Elements An asset is a resource that embodies economic benefits or services that the federal government can control.An asset is a resource that embodies economic benefits or services that the federal government can control. A liability is a present obligation of the federal government to provide assets or services to another entity at a determinable date, when a specified event occurs, or on demand.A liability is a present obligation of the federal government to provide assets or services to another entity at a determinable date, when a specified event occurs, or on demand.

11 Recognition Criteria An item meets the definition of an element.An item meets the definition of an element. The item is measurable. (Quantifiable in monetary terms.)The item is measurable. (Quantifiable in monetary terms.)

12 Sustainability A major component of the federal reporting model under consideration.A major component of the federal reporting model under consideration. Fiscal outlookFiscal outlook A task force approved at the July meeting.A task force approved at the July meeting.

13 Measurement Attributes Identification of the universe of attributes (measurement techniques versus attributes)Identification of the universe of attributes (measurement techniques versus attributes) Determine when it is appropriate to use each attributeDetermine when it is appropriate to use each attribute

14 Reporting Entity SFFAC 2 – Entity and DisplaySFFAC 2 – Entity and Display –Review the characteristics of entities that make them “reporting entities” –Test the criteria for inclusion in a reporting entity ControlControl Financial interdependenceFinancial interdependence Standards implementing conceptsStandards implementing concepts Work beginning next quarterWork beginning next quarter

15 History of Social Insurance Deliberated in 70’s and 80’sDeliberated in 70’s and 80’s Deliberated during SFFAS 5Deliberated during SFFAS 5 SFFAS 17 Compromise:SFFAS 17 Compromise: –Actuarial NPVs –Cash flows in relation to GDP –Beneficiary to worker ratios –Tax needed for actuarial balance SFFAS 25 (as amended)SFFAS 25 (as amended) –Made the Statement of Social Insurance basic

16 Social Insurance A majority of the Board tentatively agrees that an obligation exists prior to due and payable (40 quarters work in covered employment)A majority of the Board tentatively agrees that an obligation exists prior to due and payable (40 quarters work in covered employment)

17 Social Insurance Issues UnderstandabilityUnderstandability –Ability to change law –Size and volatility Not useful from a budgetary perspectiveNot useful from a budgetary perspective

18 Natural Resources Recognizing oil and gas proved reserves at calculated current valueRecognizing oil and gas proved reserves at calculated current value Results in information on:Results in information on: –Quantity of proved reserves –Value of proved reserves –Royalty revenue and depletion of reserves –Extensive disclosure and RSI

19 Natural Resources, continued Applying the oil and gas framework to:Applying the oil and gas framework to: –Coal –Timber –Grazing –Other

20 LOOKING AHEAD

21 Refining/Completing the Federal Reporting Model Inclusion of all assets/liabilities and appropriately recording changes in them.Inclusion of all assets/liabilities and appropriately recording changes in them. The reporting entityThe reporting entity Reporting beyond the traditional balance sheet and operating statementReporting beyond the traditional balance sheet and operating statement

22 Additional Reporting Statement of Social InsuranceStatement of Social Insurance Sustainability ReportingSustainability Reporting Articulation of these Statements to traditional Balance Sheet and Operating StatementsArticulation of these Statements to traditional Balance Sheet and Operating Statements

23 Expanded Outreach to Potential Federal Financial Report Users Increase due process feedbackIncrease due process feedback FASAB’s educational roleFASAB’s educational role User focus meetingsUser focus meetings

24 My Perception of FASAB’s Biggest Challenges IndependenceIndependence ResourcesResources

25 Initial Assessment Competent staffCompetent staff Committed BoardCommitted Board Generally strong agency supportGenerally strong agency support

26 FASAB On-Line Resources –All exposure drafts and final pronouncements. –Electronic mailing list for updates including newsletter and requests for comment. –Active project pages including briefing materials.