U.S. states, locals may change accounting for assets, liabilities
WASHINGTON, June 20
WASHINGTON, June 20 (Reuters) - The board that sets the accounting standards for U.S. state and local governments is seeking to establish a single method for measuring those governments' assets and liabilities in order to make it easier to understand and compare financial information.
"The goal is to enhance financial statement users' ability to assess a government's financial health and accountability," Robert Attmore, chairman of the Governmental Accounting Standards Board, said in a statement on Thursday.
The board is proposing two approaches to measuring assets and liabilities: initial amounts determined at the time an asset is acquired or a liability is incurred, and "remeasured" amounts determined in each year's financial statement.
In making those measures, the governments would have to look at the historical costs, fair values, replacement costs and settlement amounts of their assets and liabilities. It is also proposing expanding what governments disclose about how they determine fair value in the notes to their financial statements.
The independent, not-for-profit GASB is accepting comments on the proposals until Sept. 30; it will hold a hearing in November. It is also conducting a field test of having some governments apply the suggested standards to their current finances.