AICPA Omnibus

Project Objective:

Representatives of the AICPA requested that the U.S. accounting standards-setters consider adopting certain guidance for accounting and financial reporting issues that now reside in the professional auditing literature.  That guidance included: (1) the sources of accounting principles and the framework for selecting the principles used in the preparation of general purpose financial reports that are presented in conformity with generally accepted accounting principles (the GAAP hierarchy); (2) related party transactions; (3) subsequent events; and (4) consideration of an entity’s ability to continue as a going concern.

In July 2008, the FASAB joined the Governmental Accounting Standards Board (GASB) in responding to this request by acting to adopt the GAAP hierarchy guidance.  The Board believed that the transition from the auditing literature to the accounting and financial reporting standards should not result in a change in practice.  Accordingly, the Board decided to adopt the accounting and financial reporting requirements essentially as they existed in the AICPA’s professional literature and, on July 28, 2009,  issued Statement of Federal Financial Accounting Standards (SFFAS) 34, The Hierarchy of Generally Accepted Accounting Principles, Including the Application of Standards Issued by the Financial Accounting Standards Board.

With the completion of the GAAP hierarchy standard, the Board focused on a standard to incorporate the remaining three topics from the auditing literature – staff prepared a draft ED that proposed to incorporate the remaining three topics from the auditing literature – related party transactions, subsequent events, and consideration of an entity’s ability to continue as a going concern.

On August 4, 2010, the FASAB issued Statement of Federal Financial Accounting Standards (SFFAS) 39, Subsequent Events: Codification of Accounting and Financial Reporting Standards Contained in the AICPA Statements on Auditing Standards. The American Institute of Certified Public Accountants’ (AICPA) Statements on Auditing Standards (SAS) AU section 560, Subsequent Events, includes accounting and financial reporting guidance that is not discussed in the authoritative literature that establishes accounting principles. The objective of SFFAS 39 is to incorporate that guidance into the authoritative literature of the FASAB.

Events or transactions that affect the basic information or required supplementary information (RSI) may occur subsequent to the end of the reporting period but before the financial report is issued. Some of those transactions and events require adjustments to the basic information or RSI while others may require disclosure in the basic information or RSI. SFFAS 39 addresses the circumstances that may require adjustments or disclosure.

June 23-24, 2010 Board Meeting

During the April 2010, meeting, the Board approved Statement of Federal Financial Accounting Standards 39, Subsequent Events: Codification of Accounting and Financial Reporting Standards Contained in the AICPA Statement on Auditing Standards, and on May 4, 2010, the Statement was forwarded to the Principals for their 90-day review period.  Absent an objection from OMB or GAO, the Statement will be issued on August 4, 2010.

April 28-29, 2010 Board Meeting

During the April 28, 2010, meeting, the Board approved Statement of Federal Financial Accounting Standards 39, Subsequent Events: Codification of Accounting and Financial Reporting Standards Contained in the AICPA Statement on Auditing Standards.

February 24-25, 2010 Board Meeting

The FASAB discussed comments received in response to the exposure draft (ED), Subsequent Events: Codification of Accounting and Financial Reporting Standards Contained in the AICPA Statements on Auditing Standards.  The American Institute of Certified Public Accountants’ (AICPA) Statements on Auditing Standards (SAS) AU section 560, Subsequent Events, includes accounting and financial reporting guidance that is not discussed in the authoritative literature that establishes accounting principles.  The ED discussed a proposal to incorporate that guidance into the authoritative literature of the FASAB and respondents generally agreed with the ED. The Board determined that a public hearing would not be needed and staff will incorporate members’ comments into a pre-ballot draft before the April 2010 meeting.

December 16-17, 2009 Board Meeting

The FASAB has issued the exposure draft, Subsequent Events: Codification of Accounting and Financial Reporting Standards Contained in the AICPA Statements on Auditing Standards. Comments are requested by December 28, 2009.

October 21-22, 2009 Board Meeting

October 20, 2009, the FASAB approved and issued the exposure draft, Subsequent Events: Codification of Accounting and Financial Reporting Standards Contained in the AICPA Statements on Auditing Standards.  The American Institute of Certified Public Accountants’ (AICPA) Statements on Auditing Standards (SAS) AU section 560, Subsequent Events, includes accounting and financial reporting guidance that is not discussed in the authoritative literature that establishes accounting principles.  The objective of this proposed Statement is to incorporate that guidance into the authoritative literature of the FASAB.

Events or transactions that affect the financial statements may occur subsequent to the end of the reporting period but before the financial statements are issued.  Some of those transactions and events require adjustments to the financial statements while others may require disclosure in the notes to the financial statements. The ED addresses circumstances to consider in determining whether the financial statements require adjustment or disclosure.

The exposure draft requests comments by December 28, 2009.  Respondents are encouraged to provide the reasons for their positions.  The exposure draft in PDF format and the specific questions raised in Word format are available at the FASAB website.

Issue Paper for October 2009 (PDF)

August 26-27, 2009 Board Meeting

The FASAB initiated the American Institute of Certified Public Accountants (AICPA) Omnibus project to adopt certain accounting and financial reporting guidance that currently resides in the AICPA statements on auditing standards (SAS). At the August 2009 meeting, the Board discussed whether to adopt the AICPA guidance concerning related parties. Unlike other standards-setting bodies that previously adopted certain AICPA guidance, the FASAB has an on-going Entity project to determine what entities should be included in the federal entity. Accordingly, Board members initially considered whether to: (1) adopt the AICPA related party guidance essentially “as is;” (2) expand the project to allow for additional research; or (3) add the related party topic to the FASAB’s list of future projects until the Board’s Entity project is completed.

During the discussions, Board members considered existing practices regarding transactions between federal agencies (intragovernmental transactions) and noted that guidance has been developed for this area. However, members expressed concern about how adopting the AICPA language could impact the existing practices, consequences of proceeding ahead of the Entity project, and the need for research on federal government relationships such as public/private partnerships and not-for-profit organizations established to assist agencies. In addition, the Board discussed the possibility that the auditing standards could be withdrawn and how that may impact current practices as well. As a result, the Board decided to continue research on the related parties topic as part of the Entity project and discuss this determination in the basis for conclusion section of the AICPA Omnibus exposure draft (ED).  Moreover, if the auditing guidance is withdrawn before the Entity work is completed, the FASAB staff would develop a technical bulletin to provide guidance to the federal financial reporting community.

The FASAB also discussed the AICPA guidance for subsequent events, another area considered for incorporation into the FASAB standards. Members reviewed the draft AICPA Omnibus ED that included proposed language for subsequent events and the Board generally decided to proceed with the draft language.

In addition, during the June 2009 meeting, the Board decided not to adopt the AICPA language regarding going concern and noted that it has developed guidance concerning long-term fiscal sustainability – Statement of Federal Financial Accounting Standards (SFFAS) 36, Reporting Comprehensive Long-Term Fiscal Projections for the U.S. Government. However, at the August 2009 meeting, members noted that SFFAS 36 concerns the government-wide level and some component entities are experiencing fiscal stress. For example, some entities rely on fees for revenue and because of consolidation in their industry they are seeing a reduction in their revenue stream. The Board discussed these issues and determined that the intent of the project was to adopt the AICPA guidance which discusses going concern, rather than developing new guidance which would impact current practices. However, the Board expected that fiscal stress issues would be discussed in the Management’s Discussion and Analysis (MD&A) section of the entity’s financial report and the basis for conclusion section of the AICPA Omnibus ED would include the Board’s expectation.

Issue Paper for August 2009 (PDF)

June 17-18, 2009 Board Meeting

The FASAB discussed a draft exposure draft (ED) that proposes to adopt three accounting and financial reporting topics from the American Institute of Certified Public Accountant’s (AICPA) professional auditing standards – related party transactions, subsequent events, and consideration of an entity’s ability to continue as a going concern (going concern). For the June 2009 meeting, the draft ED only discussed subsequent events and going concern and staff planned to present a related party transactions discussion at the August 2009 meeting.

In discussing the topics to be included in the ED, the Board believed that the subsequent events literature could be adopted essentially as it existed in the auditing standards. Regarding going concern, the Board decided to exclude this topic from the ED. The Board has developed a draft standard for long-term fiscal sustainability reporting and an objective of the standard is to help provide users with information to determine whether future budgetary resources will likely be sufficient to sustain public services and to meet obligations as they come due. The Board will consider the need for additional guidance in the future. Also, considering that the audit literature was developed for the private sector, staff intends to adapt the subsequent events guidance to the federal environment by incorporating applicable examples.

Issue Paper for June 2009 (PDF)