GASB Proposes Financial Projections for Assessing Economic Condition of Governments, Including Pensions and Other Postemployment Benefits; Spring Hearings to be Held; Comments Accepted Until March 16, 2012

The Governmental Accounting Standards Board (GASB) has proposed that state and local governments should present five-year projections of cash inflows, cash outflows, and financial obligations that would accompany their financial statements as required supplementary information. The objective of this requirement is to better enable taxpayers, bond holders, and other interested parties to assess a government’s financial health.

GASB is seeking public comment on its proposals, which are outlined in its Preliminary Views entitled Economic Condition Reporting: Financial Projections. Based on its research and input from financial statement users, preparers, and auditors, GASB believes that the following information is necessary to assist users in assessing a government’s economic condition:
  • Projections of cash inflows and cash outflows, with explanations of the known causes of fluctuations
  • Projections of the financial obligations, including bonds, pensions, other postemployment benefits, and long-term contracts, with explanations of the known causes of fluctuations
  • Projections of annual debt service payments, including principal and interest
  • Narrative discussion of governments’ dependencies on other governments to provide its services.
GASB is seeking public comment on the Preliminary Views through March 16, 2012.
 
GASB will host two public hearings to obtain feedback on the Preliminary Views from interested individuals and organizations:
  • March 29, 2012, 8:30 a.m. PDT, in Los Angeles, California
  • April 17, 2012, 8:30 a.m. EDT, in New York City

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