Investments and Other Equity Interests in Non-Federal Entities

Project Objective:

Federal standards address only two types of investments – investments in federal securities (excluding those available for sale or early redemption) and direct loans.  Long-standing practice has been for agencies to rely on analogies to existing FASAB standards or to other literature to fill this void.  Currently, some such investments are accounted for by analogy to SFFAS 2, Accounting for Direct Loans and Loan Guarantees, but using a market risk adjusted discount rate and others at fair value in accordance with Office of Management and Budget (OMB) Circular A-136.  In addition to holding securities, a variety of transactions are entered into including exchanges of securities, extension of additional credit facilities, and modifications.  The objective of this project is to provide accounting standards for federal investments and other equity interests in non-federal entities, including various assets that can result from the federal government’s actions in stabilizing the economy.

HISTORY OF BOARD DELIBERATIONS (reverse chronology)