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GASB project – Concepts statements
GASB Concepts Statement No. 1, Objectives of Financial Reporting, issued in 1987, details the objectives of financial reporting and serves as a guide in making decisions on financial reporting issues. In establishing the objectives for financial reporting, considerable weight was given to the concept of accountability. From that concept, one important objective introduced in the Statement was that “financial reporting should provide information to assist users in assessing the service efforts, costs, and accomplishments of the governmental entity.”
In 1994, after extensive research on SEA, the GASB issued Concepts Statement No. 2, Service Efforts and Accomplishments Reporting. That Statement provided the opportunity to elaborate on accountability in government and the importance of reporting SEA performance information as part of general purpose external financial reporting (GPEFR). The Board stated that SEA performance information is necessary for assessing accountability and in making informed decisions: “Therefore, to be more complete, general purpose external financial reporting needs to include service efforts and accomplishments information.”
In 2008, the Board issued an Exposure Draft of an amendment of Concepts Statement No. 2, Service Efforts and Accomplishments Reporting, to reflect developments that have taken place in the decade-and-a-half since its issuance and to clarify certain other issues. The proposed changes to Concepts Statement 2 are based both on the findings of extensive research by the GASB and others, and on the results of the GASB’s monitoring of state and local governments that report SEA performance information.
In the Exposure Draft, the GASB proposed to modify four sections of Concepts Statement No. 2 (Purpose and Scope, The Elements of SEA Reporting, Limitations of SEA Information, and Enhancing the Usefulness of SEA Information) and to eliminate one section (Developing Reporting Standards for SEA Information). It is the GASB’s belief that this proposal would enhance the common understanding of the elements, characteristics, limitations, and methods of communicating SEA performance information.
It is important to note that the proposed changes would clarify that it is beyond the scope of the GASB to establish the goals and objectives of state and local government services, to develop specific nonfinancial measures or indicators of service performance, or to set standards for service performance.
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