GASB’s Certain Risk Disclosures Proposal and How You Can Help - Joel Black, Governmental Accounting Standards Board (GASB) Chair

GASB’s Certain Risk Disclosures Proposal and How You Can Help

It has been a busy summer at the GASB, and I can’t believe how quickly it is going by. I hope you have had the opportunity to disconnect and spend time to relax with family and friends.

In case you haven’t seen it already, I wanted to mention a proposal on certain risk disclosures that the Board issued a few weeks ago.

When you think of the risks that a government faces, you could certainly think of a wide variety of things.?The proposal the GASB issued earlier this summer, Certain Risk Disclosures, doesn’t address all governmental risks, or even all risks related to a government’s financial condition.

More narrowly, the project focuses on two categories of risk which could affect the level of services a government is providing or its ability to meet obligations when they come due: vulnerabilities due to (a) certain concentrations and (b) certain constraints common in the government environment.

Our objective is to create disclosures which are intended to provide financial statement users with information about potential events and circumstances, related to concentrations or constraints, before a government experiences possible severe financial stress. This meant to function as an early warning sign that informs their decision making and assessments of accountability.

The proposal identifies specific circumstances related to these two categories of risk, which, if met, would require disclosures of those circumstances. Governments where those conditions don’t exist, however, wouldn’t be subject to the disclosures.

Share Your Thoughts with Us

One of the things we’ve been working on since I began as GASB chair two years ago is finding ways to make it easier for you engage with us and share your thoughts and ideas with the Board.

For this project, we’ve developed two short videos that highlight key aspects of the proposal. Please take a few minutes to watch the videos. At their conclusion, you’ll find a link to the Exposure Draft, Certain Risk Disclosures, and to an electronic input form on the proposal that makes it easy to share your thoughts with us.

The form asks a series of questions about the proposal. You are welcome to answer whichever questions you’d like and don’t need to feel obligated to answer them all. Some questions are open ended so you can share whatever you’d like us to know, others address more specific areas we need your input on.

Click on the link, enter your answers, and click submit, and we’ve got your feedback. The Board will take your feedback into consideration in same way it does comment letters.

And by the way, the GASB is still accepting comment letters through the traditional process and we encourage submittal of your input in whichever way you prefer.

The proposal, Certain Debt Disclosures, and the two short videos are available now. We’d love you to review the document, watch the videos, and let us know what you think by the September 30 deadline.

If you would like to connect with me regarding this or any other governmental accounting and financial reporting topic, I’d love to hear from you.

Enjoy the rest of your summer.

Joel Black, Governmental Accounting Standards Board (GASB) Chair