Gasb Requests for Public Comment
? Evaluate the benefits of providing public comments to exposure drafts.
The governmental Accounting Standards Board has a duty of expanding the standards of the state and local governmental accounting and financial reporting and other accounting and financial reporting communications that will result in useful information for users of financial reports. It is also a way to guide and educate the public, including issuers, auditors, and users of those financial reports.
The Exposure Draft is the accounting profession??™s way of letting the public know of changes to the accounting standards which govern financial reporting and gives the public an opportunity to comment upon the draft before it is finalized and issued after the exposure draft has been circulated for several months. The draft is also designed to provide the public with complete information on plan assets, benefit obligations, cash flows, benefit costs and other relevant information. This is governed by global standards which tell how accountants report company accounts. IAS19, (International Accounting Standards) which governs how defined benefit pension schemes are accounted for, is subject to the same short-term approach as the rest of the corporate world. It implies that it is necessary to the long-term nature of defined benefit pension schemes.
The concept of public comments to exposure drafts goes far beyond involving all people to state their view but to modify the draft through the eyes of the public and getting the opportunity to edit the draft in the most convenient way. Through the reasons as to why the public would agree or disagree with the exposure draft, the GASB will have an opportunity at the final inclusion to facilitate their analysis of the comment letters with an assessment from the explanations of the public views including alternatives that they believe should be considered. All public comments are distributed to the Board and considered during the Board??™s deliberations leading to their final statement.
? Determine the critical elements of the exposure draft.
The critical elements of this exposure draft are: Disclosures pertaining to types of plan assets- this is to enhance the usefulness of asset-related disclosures that would provide users with an improved understanding of the nature of plan assets. Companies are now required to provide information concerning the percentage of plan assets invested in the following broad classifications: debt securities; equity securities; and real estate investments. Narrative disclosures pertaining to investment policy and estimated rates of return ??“ This is a required narrative. It includes the discussion of the company??™s investment goals, risk management practices, and acceptable and prohibited investments. It might also include information such as the basis for the expected rate of return. Measurement dates ??“ requires that the measurement of plan assets and obligations to be reported.
Some other critical elements of the exposure draft are giving the option to defer and amortize actuarial gains and losses over a future period which would be eliminated and all actuarial gains and losses would be required to be recognized immediately through other comprehensive income. The full amount of the overfunded or underfunded status of the defined benefit plans would be recognized, the proposals would affect other aspects of pension accounting, including recognition of the actual return on plan assets and service costs. Disclosure requirements would increase significantly and a final standard is expected to be issued, also the IASB is working on a project to clarify certain aspects in IAS 19 around termination benefits.
??? Analyze the impact of the proposal on governmental agencies.
Governmental agencies have to play their role at ethics is always a significant issue that kept up to par through the supervision of these agencies. Government agencies have most of their work cut out for them since the decision making of the GASB based on the comments of the public is all documented and the search for any unethical issues can easily be found. The Board has expanded the ability of the usage of these proposals in a wide form that will allow government agencies to have more access and enable them to have more information for they are ones that have more questions. The Boards concluded that a focus on a broader primary user group fulfills the needs of the full range of capital providers both in jurisdictions with a corporate governance model defined in the context of shareholders and in jurisdictions with a corporate governance model that focuses on stakeholders, which is a broader group than shareholders.
This proposal enables the government to be accountable to citizens for the proper administration and stewardship of its assets, and thus meets both the operating and stewardship performance objectives. The two most common concerns noted since the implementations are lack of comparability in assessing asset condition both within and among entities and measurement and reporting practices and formats that vary greatly among entities. In an attempt to achieve greater consistency and comparability in the reporting of exposure draft and to increase the reliability and relevance of estimates, the Board believes that certain refinements and changes to are required. This will create reliance from the government and form a bond between the public and the agencies.
??? Prepare a comment related to the exposure draft
The benefit of exposure draft is a route to uniting the public with the Board and allowing the option to work together for a common goal. The level of trust and comfort from the public towards the Board will rise, the gap for mistakes and disagreements between the two will decrease and the satisfaction level on final drafts of decision will rise as well. Public commenting is a great strategy that can ultimately benefit the organization as well as the public. Exposure draft is a great tool that shows a significant hope of success and cooperation from all directions for everyone to benefit as well as ease the workload and decision making for the Board.