1. The Federal Accounting Standards Advisory Board What Is the Federal Entity and Shouldn’t We All Use the Same GAAP? AICPA National Governmental Accounting and Auditing Update August 18, 2008

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

3. What is FASAB’s role? GASB FASAB FASB

4. What is FASAB’s role? GAAP Generally Accepted Accounting Principles FASB GASB FASAB

5. What is the Federal Entity? Defined in SFFAC 2Defined in SFFAC 2 –Conclusive criterion –Indicative criteria RevisitingRevisiting –Questionable or unique entities –Consistency, completeness, and accountability –Material weakness

6. What is the Federal Entity? Objectives of entity projectObjectives of entity project –Clarify boundaries –Provide guidance ChallengesChallenges –Difficulty in defining boundaries –Definition of “control” –Differing viewpoints –Legislation

7. Who’s In and Who’s Out? Included in CFRExcluded from CFR

8. Federal Entity Active Project Status Task ForceTask Force SurveysSurveys –CFO –OIG –FFRDCs

9. Source of GAAP Background AICPA Rule 203 StatusAICPA Rule 203 Status Current practiceCurrent practice Revisiting newsletter guidanceRevisiting newsletter guidance –Consistency, completeness, and accountability –Consolidation issues

10. Examples of Current Practice FASABFASBOther* * GASB or some mixture of the three sources of GAAP.

11. Pros/Cons of Conversion ProsPros –Consistency, completeness, and accountability –Consolidation –Avoid two sets of information –Avoid year-end manual processes

12. Pros/Cons of Conversion ConsCons –Costs to convert –Costs passed on to users –Comparability to sector (e.g., utility) –FS differ from SEC submission –Perceived benefit only at CFR level

13. Pros/Cons of Conversion Cons (contd.)Cons (contd.) –Indirect impact on legislative and judicial branches –Potential for OCBOA or less than unqualified opinions –Loss of comparison to historical reporting –Resistance from agencies

14. Source of GAAP Active Project Status SurveySurvey WorkgroupWorkgroup Tentative DecisionsTentative Decisions –No entities required to convert to FASAB at this time –CFR can include two sources –Intragovernmental eliminations

15. How can I stay informed? Visit www.fasab.gov Sign up for FASAB listservSign up for FASAB listserv Read bi-monthly FASAB newsletter and active project pagesRead bi-monthly FASAB newsletter and active project pages Attend meetingsAttend meetings

16. Questions? www.fasab.gov Melissa Loughan Assistant Director 202.512.5976 loughanm@fasab.gov (Federal Entity) Wendy Payne Executive Director 202.512.7350 paynew@fasab.gov Julia Ranagan Assistant Director 202.512.7377 ranaganj@fasab.gov (Source of GAAP)