GASB guidance focuses on improving, clarifying standards for accounting changes

Minerva Biven


GASB issued advice Monday developed to boost the accounting and fiscal reporting prerequisites for accounting adjustments and mistake corrections.

GASB Statement No. 100, Accounting Changes and Error Corrections, gives advice designed to lead to facts that is much easier to realize and extra trustworthy, applicable, steady, and equivalent across governments for making choices and assessing accountability.

“Governments and other stakeholders must discover a lot of of the needs of Assertion 100 familiar,” GASB Chair Joel Black mentioned in a information launch. “But they should really uncover the understandability of the assistance drastically improved, and economic assertion buyers need to advantage from the new tabular disclosure.”

The earlier specifications for condition and neighborhood federal government economic reporting on accounting changes and mistake corrections had been established in the 1970s right before becoming codified in 2010 in GASB Assertion No. 62, Codification of Accounting and Economical Reporting Direction Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements. GASB’s pre-agenda analysis identified diversity in implementing the existing benchmarks in follow, which includes issues with deciding upon the acceptable group of accounting modify or mistake correction.

Assertion No. 100 defines the following classes:

  • Modifications in accounting concepts.
  • Alterations in accounting estimates.
  • Alterations to or within the monetary reporting entity.
  • Corrections of glitches in beforehand issued economic statements.

Statement No. 100 prescribes accounting and financial reporting for each and every category of accounting adjust and error corrections. It requires that:

  • Variations in accounting principles and mistake corrections be documented retroactively by restating prior durations.
  • Changes in accounting estimates be described prospectively by recognizing the change in the present-day interval.
  • Modifications to and within the financial reporting entity be reported by adjusting starting balances of the current time period.

The assertion also addresses how accounting alterations and error corrections need to be exhibited in economical statements, disclosed in notes, and offered in needed supplementary data and supplementary[NA1]  facts.

Assertion No. 100 carries ahead some of the needs of Assertion No. 62 but with clearer explanations, GASB stated. About classification, a notable adjust relates to modifications to or inside the fiscal reporting entity, which previously did not encompass improvements in the reporting entity, such as a improve from a discrete presentation of a part unit to a blended presentation or vice versa. Regarding take note disclosures, Assertion No. 100 demands that governments disclose the effects of every accounting transform and error correction on beginning balances in a tabular format.

The demands of Assertion No. 100 are effective for accounting improvements and error corrections made in fiscal years starting after June 15, 2023, and all reporting periods thereafter. Previously software is encouraged.

— To remark on this article or to counsel an concept for a different report, get in touch with Kevin Brewer at [email protected].


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