United States

Proposed enhancements to framework for notes to financial statements


The Governmental Accounting Standards Board (GASB) issues Concepts Statements to provide a conceptual framework of interrelated objectives and fundamental concepts that can be used as a basis to establish future consistent financial reporting standards. Recently, the GASB issued an Exposure Draft, Communication Methods in General Purpose External Financial Reports That Contain Basic Financial Statements: Notes to Financial Statements - an amendment of GASB Concepts Statement No. 3, to elaborate on the types of information that should be disclosed in notes and the types of information that are not appropriate for note disclosures. In particular, the proposal distinguishes information as essential to users if the information is characterized by the presence of evidence that:

  • The information is being utilized in users’ analyses for making decisions or assessing accountability; or 
  • If the information became available, users would modify their analyses for making decisions or assessing accountability to incorporate that information. 

The concepts included in the proposed Concepts Statement would establish that information disclosed in notes to financial statements, at a minimum, should correspond to the reporting units presented in the financial statements. The concepts proposed also would establish that an evaluation of the expected benefits and perceived costs associated with disclosing information in notes to financial statements should be conducted separately and in addition to the evaluation of the overall expected benefits and perceived costs.

The Exposure Draft is available for comment until April 17, 2020.

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