The Financial Reporting Entity Field Test
The GASB is soliciting participants for a field test it is conducting in conjunction with the issuance of an Exposure Draft in its financial reporting entity project, which would amend Statements No. 14, The Financial Reporting Entity, and No. 34, Basic Financial Statements—and Management’s Discussion and Analysis—for State and Local Governments.
The GASB is expected to approve for release at its March teleconference an Exposure Draft of a proposed Statement, The Financial Reporting Entity, an amendment of GASB Statements No. 14 and No. 34. This Exposure Draft, if issued as a final standard, is expected to better meet user needs and to address reporting entity issues that have arisen since the issuance of those Statements. The proposed Statement is scheduled for publication on the GASB website (www.gasb.org) on March 26.
Field tests are a part of the GASB’s due process activities and help the GASB to establish effective standards. Participating governmental entities volunteer to go through the exercise of “implementing’’ the proposed standard as if it were in place and then provide feedback to the GASB regarding that process. Field tests point out potential problems related to the implementation of proposed standards and allow the GASB to gather valuable information about implementation costs.
All city, county, state, tribal, and special-purpose governments—including health care entities—that have component units are eligible to participate. Participation in a GASB field test can provide governments with a variety of benefits, not the least of which is learning about the proposed standards directly from the GASB’s project staff and being able to ask the staff questions regarding implementation issues. This gives participating governments a significant head start on implementation when the final standard is issued. The GASB publicly acknowledges the assistance of the governments that participate in its field tests for those that wish to be acknowledged.
Interested governments first participate in a pre-test interview. Afterward, a participating government would apply the requirements of the proposed standard and answer certain questions regarding its financial reporting entity. It is expected that participating governments will have between six to eight weeks after the issuance of the Exposure Draft to complete the field test.
Entities interested in participating in the financial reporting entity field test should contact GASB Project Manager Wesley Galloway either by e-mail at email@example.com or by telephone at (203) 956-5272.