Tribal Government Input on Governmental Accounting Standards Board Projects
The GASB is an independent organization that establishes and improves standards of accounting and financial reporting for tribal, state, and local governments. It is recognized by the accounting industry and the capital markets as the official source of generally accepted accounting principles for governments. NAFOA holds a seat on the Governmental Accounting Standards Advisory Council, which is responsible for consulting with the GASB on technical issues on the GASB's agenda, project priorities, matters likely to require the attention of the GASB, and concerns of tribal governments.
NAFOA is encouraging tribal governments to provide input on several projects that would benefit from tribal input:
- Financial Reporting Model Reexamination Project: The objective of this project is to make improvements to the directly related components of the financial reporting model that have been in effect for at least five years. The focus of these improvements is to (a) enhance the effectiveness of the model in providing information that is essential for decision-making and assessing a government's accountability; and (b) address certain application issues identified through the pre-agenda research on the financial reporting model.
- Debt Disclosure Project: The primary objective of this project is to define debt, including direct borrowing, to distinguish it from other long-term liabilities in applying disclosure requirements for notes to financial statements. The project would be intended to improve the effectiveness of existing guidance and enhance the decision-usefulness of resulting information. The project also would evaluate whether the disclosures in notes to financial statements related to long-term debt also should be required for short-term debt and whether additional disclosures for direct borrowing are essential to a user's understanding of the basic financial statements.
- Fiduciary Activities Project: The primary objective of this project is to develop guidance regarding whether and how governments should report fiduciary activities in their general purpose external financial reports. Other objectives of this project include assessing whether additional guidance should be developed (a) to clarify the difference between a private-purpose trust fund and an agency fund; (b) to clarify whether a business-type entity engaging in fiduciary activities should present fiduciary fund financial statements; and (c) to consider requiring a combining statement of changes in assets and liabilities for agency funds.
- Revenue and Expense Recognition Project: The objective of this project is to develop a comprehensive application model for the recognition of revenues and expenses that arise from nonexchange, exchange, and exchange-like transactions, including guidance for exchange transactions that has not been specifically addressed in the current literature.
NAFOA’s participation in the GASAC provides the GASB with a tribal government perspective to help make well-informed decisions and improve the standards of tribal governmental accounting and financial reporting.
Current Status and Action:
NAFOA has prepared broadcast alerts and white papers detailing the proposed projects’ provisions and implications for tribal governments and their entities that conduct ‘governmental’ activities. We encourage tribal governments to participate in the projects to ensure that the GASB understands how provisions, reporting requirements (included those for tribe-wide statements), and revenue recognition, among other changes, affect tribal government finance. NAFOA will also present these proposals in a future webinar and at our 35th Annual Conference in San Francisco.