On the Horizon:
A Number of New Proposals are Coming Soon

The GASB is working toward the issuance of four Exposure Drafts by the end of the second quarter of 2021. Those Exposure Draft are expected to address a variety of key practice issues for state and local governments. This article briefly highlights each of the four projects:
  • Compensated Absences
  • Risks and Uncertainties Disclosures
  • Prior-Period Adjustments, and
  • Implementation Guidance—2021 Update.
     

Compensated Absences


This project is fully reexamining existing guidance in Statement No. 16, Accounting for Compensated Absences, including:
  • Various forms of accrued leave benefits
  • Measurement options for sick leave, and
  • The usefulness of required notes to financial statements for decision making and assessing accountability.
The Board is considering issues including:
  • When a liability should be recognized for various types of leave
  • How compensated absences liability should be measured, and
  • What disclosures about compensated absences should be required.
What’s next: After concluding initial project deliberations, the Board is expected to consider issuing an Exposure Draft for public comment in the first quarter of 2021.

More information about the Compensated Absences project.

 

Risks and Uncertainties Disclosures


The primary project objectives involve identifying potential risks and uncertainties in the state and local government environment and considering the development of disclosure requirements around them.

The Board is considering issues including:
  • Categories of risks and uncertainties (for example, estimates and concentrations)
  • Whether specific disclosure requirements within each category should be proposed, and
  • Potential thresholds associated with risk and uncertainty disclosures.
What’s next: After concluding initial project deliberations, the Board is expected to consider issuing an Exposure Draft for public comment in the second quarter of 2021.

More information on the Risks and Uncertainties Disclosures project.

 

Prior-Period Adjustments


The objective of this project is to improve the accounting and financial reporting for prior-period adjustments, accounting changes, and error corrections in Statement No. 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements.

The project is fully reexamining the existing standards to address issues related to inconsistency in practice, confusion about and difficulty applying the existing requirements, and the usefulness of the related disclosures.

The Board is considering issues including:
  • Types of events that constitute the different accounting changes and error corrections
  • The relationship between the existing requirements for accounting changes and error corrections and other GASB requirements
  • Clarification of terminology regarding reporting of accounting changes and error corrections, and
  • Usefulness of the disclosure requirements associated with each type of accounting change and error correction.
What’s next: After concluding initial project deliberations, the Board is expected to consider issuing an Exposure Draft for public comment in the second quarter of 2021.

More information on the Prior-Period Adjustments, Accounting Changes, and Error Corrections project.

 

Implementation Guidance—2021 Update


This project will result in the issuance of a new annual Implementation Guide. Proposed question-and-answer guidance provided in the Update will address issues including leases, fiduciary activities, and derivative instruments. All updates will be incorporated into the Codification of Governmental Accounting and Financial Reporting Standards and the Comprehensive Implementation Guide, as appropriate.

What’s next: After completing initial project deliberations, the Board is expected to consider clearing for issuance an Exposure Draft at its November 9, 2020 videoconference.

More information on the Implementation Guidance—2021 Update project.