From the Chairman

By David A. Vaudt, GASB Chairman

Financial Reporting Model Proposal Nears

The GASB will release the Preliminary Views (PV), Financial Reporting Model Improvements, on September 28. This Q&A with GASB Chairman Dave Vaudt previews the document and highlights key issues for stakeholders to be aware of.

GO: This is the second document released in the reexamination of the Financial Reporting Model. How is it different from the first? 

DV: The Invitation to Comment (ITC), which the GASB released at the end of 2016, laid out the ideas and options for recognition in and presentation of governmental funds in a neutral fashion and stated no preference for one approach over another. At this stage, we have received input from stakeholders on the options in the ITC, deliberated as a Board, and now have an approach and overall direction for governmental funds in mind. However, I should note that an alternative view to this direction is also presented in the PV. 

GO: The title of the new document doesn't mention governmental funds. What is covered in the Preliminary Views beyond that topic? 

DV: Beyond governmental funds, we propose enhancing proprietary fund financial statements by introducing a description of nonoperating and a definition of operating and including a presentation of a subtotal for operating income or loss and noncapital subsidies. We also propose providing budgetary comparison information only as required supplementary information and requiring two variance columns. Other topics include proposed guidance on the communication of major component unit information and the introduction of a schedule of government-wide expenses by natural classification. 

GO: What kind of response did you receive on the ITC? 

DV: The Board received more than 100 comment letters on the ITC and had strong participation in the series of public hearings and user forums last spring. With this forthcoming PV, we really want to see if we can substantially increase stakeholder input and participation. We want to provide guidance that results in meaningful financial reporting information and we can't do it without stakeholders' ideas and input. 

GO: Will you also be holding public hearings for this document? 

DV: After the comment period, which will go from the end of September to mid-February, a series of public hearings and user forums are scheduled in three cities in March. More information about those dates and locations will be provided in the opening pages of the document—so stay tuned for more on that. 

GO: If a stakeholder commented on the ITC, can they hold off on commenting this time around and wait for the Exposure Draft (ED)? 

DV: We're in a more formative stage right now, so by sharing their thoughts at this point, they're really helping firm up the direction and approach we're going to ultimately take. It will be critical for the Board to have the benefit of their thinking at the ED phase as well, but in terms of having a big impact, their participation at PV stage is essential. 

On September 28, the Preliminary Views, Financial Reporting Model Improvements,

is scheduled for issuance and posting on GASB Website. An additional Preliminary Views, Recognition of Elements of Financial Statements, which contains related recognition principles,

also will available at that time. Please review both documents and share your thoughts

with us at