Norwalk, CT, August 20, 2013—The Financial Accounting Foundation (FAF) Board of Trustees today issued for comment a revised proposal to clarify the characteristics of information that the Governmental Accounting Standards Board (GASB) may incorporate into the financial accounting and reporting concepts, standards, and guidance that it issues for state and local governments.

The proposal, GASB Scope of Authority: Consultation Process–Revised Proposal, outlines a revised process through which the GASB would consult with the FAF Trustees´ Standard-Setting Process Oversight Committee to determine whether certain information that the GASB might consider for standard-setting activity is "financial accounting and reporting information" within the scope of the Board´s standard-setting mission.

"In comments we received on the original proposal, many stakeholders expressed concern that the Trustees were stepping into the GASB´s standard-setting role," said FAF Chairman Jeffrey J. Diermeier. "The new proposal would maintain the GASB´s independence by moving the Oversight Committee´s involvement from the agenda-setting process to a pre-agenda consultation. It also would clarify the FAF Trustees´ role in advising and counseling the GASB as it determines whether information to be used in standard setting constitutes ‘financial accounting and reporting information.´"

GASB Chairman David A. Vaudt said: "The GASB is pleased that the Trustees have proposed a revised process based upon the GASB´s concept statements and focused on pre-agenda consultation. The revised proposal strikes a balance that should maintain the GASB´s independence while affording the FAF Trustees the appropriate oversight to ensure that the GASB is operating within its scope of authority."

FAF President and CEO Teresa S. Polley said: "In May 2013, we formed a working group that included the GASB and the FASB chairs to review the original proposal and analyze the relationship between the FAF and the GASB. The working group and the Trustees developed a revised proposal that all of us believe would maintain the independence of the GASB and ensure appropriate oversight authority by the Trustees."

Under the revised proposal, the GASB would classify governmental financial information as: When the GASB believes that certain Group 2 information it is considering for standard-setting activities is within its scope, the proposal provides for the GASB and the Oversight Committee to consult on whether the information constitutes "financial accounting and reporting information." The GASB and the Oversight Committee will consider the classification of Group 2 information based on characteristics contained in the GASB´s Concepts Statements.

Under the original proposal, the GASB, when considering a project containing Group 2 information, would have provided the Oversight Committee with an expanded project proposal during the GASB´s agenda-setting (project-selection) process. The Oversight Committee would have made recommendations to the Trustees on whether the project was within the GASB´s scope of authority.

The revised proposal changes the Oversight Committee´s involvement from the GASB´s agenda-setting process to a pre-agenda consultation, as follows: The proposal is available at the FAF website. Stakeholders can email comments to GASBscope@f-a-f.org or mail them to the following address by September 30, 2013: GASB Scope, Financial Accounting Foundation, 401 Merritt 7, PO Box 5116, Norwalk, CT 06856

About the Financial Accounting Foundation

The FAF is responsible for the oversight, administration, and finances of both the Governmental Accounting Standards Board (GASB) and the Financial Accounting Standards Board (FASB). The Foundation is also responsible for selecting the members of both Boards and their respective Advisory Councils.

About the Governmental Accounting Standards Board

The GASB is the independent, not-for-profit organization formed in 1984 that establishes and improves financial accounting and reporting standards for state and local governments. Its seven members are drawn from the Board´s diverse constituency, including preparers and auditors of government financial statements, users of those statements, and members of the academic community. More information about the GASB can be found at its website, http://www.gasb.org/.