Gasb Requests for Public Comment, Essay Example

Benefits of Providing Public Comments to Exposure Drafts

Governmental Accounting Standard Board (GASB) for the adoption of new rules and procedures concerning how to measure, report and communicate financial information concerning government entities seeks public comments on matters under the review. For example currently the organization has to projects vis-à-vis the recognition of elements of financial statement and measurement approach and the exposure draft related to pension accounting financial reporting. Such comments enable the organization to get a first-hand information and point of view of the diverse groups of stakeholders who are directly or indirectly affected by the rules and conventions formulated by the body. Thus the ED may be regarded as a step that enables the entity to ensure the stakeholders feedback and then adoption of such rules formulated by the body.

Critical Elements of GASB Exposure Draft

With the passage of time accounting profession is going through tremendous transformation process; the GASBwhich has been given the mandate to revise rules and regulations that how government entities should measure, process and communicate financial information has taken the challenges and the organization has issued many directives concerning accounting standards. The organization has adopted different standards from its very inception that in turn has helped the organization to accomplishing efficiencies and effectiveness while reporting the financial information of government concern (Meigs, William, & Haka, 2008). It is worth mentioning that elements included in the exposure draft are just guidelines and thus could not be regarded as rules and convictions. However once the board members discuss the comments in the exposure draft, these are given a legal status and are adapted as rules and convictions.

The exposure draft (ED) is published by GASB for getting the public comments(CEBS, 2010). The exposure draft is intended to bring more transparency and efficiency in the use of pension funds and accounting aspect related to the pension funds. The exposure draft may be regarded as non-authoritative guidelines that are essentially framed as a result of discussions between various stakeholders in the field including government officials, audit and accounting specialists, management professionals, public accountants etc. These different stakeholders by critically reviewing the proposed amendments will provide the needed comments from different perspective regarding the proposed changes. On the basis of their discussion that are put in the exposure draft the GASB issued various guidelines that are known as accounting rules and conviction to be followed while reporting the financial data of government entity (GASB, 2011).

The Impact of the Proposal on Governmental Agencies

Since the recognition of elements of financial statement and measurement approach and pension accounting financial reporting are an integral aspect of government entities as most of the governmental organizations provide pension funds facilities to its employees. Through the implementation of preliminary view and the exposure draft on pension, this will amend the GASB statement No. 27 that has already been finalized. On the other hand the formation of standard rules and procedure concerning pension funds accounting and reporting will take place after 30^th September 2011. In addition to these two amendments to the GASB statement No. 27, the exposure draft is also intended to amend the GASB statement No. 50 (GASB, 2011). It is believed that the newly formulated standards will add towards the GASB major objective of bringing more transparency and more accurate accounting standards according to the changing environmental conditions.

Comment on Exposure Draft

The current exposure draft contains public comments regarding the recognition of financial statements, the measurement approach that should be used for measuring the financial statement data of the governmental organizations, evaluation of the measurement approach, initial amount, re-measured amount, the impact of such changes on the reporting quality and the measurement focus which is regarded as prime responsibilities of GASB (GASB, 2011). The writer believes that the elimination of Annual Required Contribution (ARC) will have drastic impact over the Debts to Assets ratio of government institutions.

In addition the procedure proposed by the GASB regarding the present value calculation for the funds held by the organization are against the reality and the procedure followed by financial institutions. The writer believe that by following the procedure proposed by GASB,  the matters will be further complicated and government departments will get an added ability to manipulate different facts and figures that will further deteriorate the matter and a move against the transparency objective of the GASB.