GASB Project Manager Joseph C. Blythe noted that, "This revised Exposure Draft responds to the commitment made in Statement 14 to conduct additional research on organizations that, due to the nature and significance of their relationship with a primary government, should be evaluated for inclusion in the financial reporting entity."
Under the proposal, entities that are legally separate, tax-exempt organizations affiliated with a primary government and that meet each of three criteria would be discretely presented within the financial reporting entity. The three criteria are:
The proposal would continue to require professional judgment to determine whether the relationship between a primary government and an organization that does not meet the proposed criteria is such that the financial reporting entity’s report would be misleading or incomplete if the organization were excluded.
The GASB has set an October 31, 2001, deadline for receipt of written comments on the proposal. The Board also has scheduled two public hearings on October 29 in Phoenix and November 2 in New York City. More information about the hearing may be found in the Exposure Draft. A single copy of the Exposure Draft may be obtained free of charge by contacting the GASB’s Order Department at (800) 748-0659.
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 this website.