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State Board Report

September 2013

By classifying governmental financial information into three categories, the Financial Accounting Foundation (FAF) proposes to determine the standard-setting activity of the Governmental Accounting Standards Board (GASB). On August 20, the FAF released its “GASB Scope of Authority: Consultation Process– Revised Proposal,” based on the comments it received on its February 26, 2013 proposal. Comments on the Revised Proposal are due September 30. The three groups of information are: Group 1- Information that the GASB assesses as clearly within its standard-setting authority; Group 2- Information that does not fit into Groups 1 or 3, but that does meet at least one of the objectives of governmental financial accounting as described in the GASB’s Concept Statements; Group 3- Information clearly recognized as being outside GASB’s standard-setting authority.

Information falling in Group 2 would call for the GASB to consult with the FAF Trustee’s Standard-Setting Process Oversight Committee only on whether it constitutes “financial accounting and reporting information” in the context of the GASB’s mission, not to vote on any specific project. The earlier proposal had the Oversight Committee involved in the GASB’s agenda-setting process, rather than in pre-agenda consultation. FAF Chairman Jeffrey J. Diermeier said the new proposal “would maintain the GASB’s independence.”

GASB Chairman David A. Vaudt commented: “The revised proposal strikes a balance that should maintain the GASB’s independence while affording the FAF Trustees the appropriate oversight to ensure that the GASB is operating within its scope of authority.”

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