For WizardKim-VDPR2

Week 8 Video Discussion Post 2nd Response:

Instructions: Respond to the post below from your fellow classmate. Any opinions, or anything you would like to add to discuss about their post. Must be three substantial paragraphs, and three references.

  In the past few weeks, we have watched videos pertaining to accounting groups that I had never heard of, however, this week I was excited to see a group I knew existed. Despite knowing the existence of the GASB, I did not know anything about the group. As many of you know, I am a firm believer that to understand anything you must first understand its history. The GASB was created 1984, as an independent, private- sector organization based in Norwalk, Connecticut (About the GASB, 2020). The GASB establishes accounting and financial reporting standards for U.S. state and local governments that follow Generally Accepted Accounting Principles. The GASB standards are recognized as authoritative by state and local governments, state Boards of Accountancy, and the American Institute of CPAs (About the GASB, 2020). The GASB strives to provide useful information to taxpayers, public officials, investors, and others who use the financial statements. The Financial Accounting Foundation supports and oversees the GASB. Created in 1972, the Financial Accounting Foundation is an independent, private-sector, not-for-profit organization also based in Norwalk, Connecticut. The Financial Accounting Foundation is responsible for the oversight, administration, financing, of the GASB and the Financial Accounting Standards Board. The GASB, the FASB, and the FAF mission is to create and progress financial accounting and reporting standards in an effort to provide information to outside investors (About the GASB, 2020).

            In the video meeting held Wednesday September 8, 2020, the board members discussed the recent research on risks and uncertainties (GASB Board Meeting, 2020). The meeting started by board members discussing recent outreach and literary research conducted related to risks and uncertainties disclosures. The meeting then went on to discuss whether or not to require disclosures that would broadly describe the use of estimates in the preparation of government financial statements. Next, the Board members decided a disclosure that generally acknowledges the use of estimates in the preparation of governmental financial statements should not be proposed to be required at this time (GASB Board Meeting, 2020). Lastly, the Board discussed two alternatives of a note disclosure connected to certain significant estimates. Additionally, the Board tentatively decided the note disclosure requirements related to significant estimates should be included in specific qualifications or limitations (GASB Board Meeting, 2020).

            I realize this information is confusing because, to be honest, after listening to the video I had no clue what was happening. In an attempt to provide a better understanding of what was actually discussed, I conducted a lot of additional research (Risks and Uncertainties Disclosures, 2020). FASB Accounting Standards Codification Topic 275, Risks and Uncertainties requires a nongovernmental entity to disclose risks and uncertainties relating to the nature of its operations, its estimates, and vulnerability due to certain concentrations (Risks and Uncertainties Disclosures, 2020). There are three broad categories of disclosure requirements in FASB Topic 275 relevant to the government. However, because of the differences between the public and private sectors, each group needs to be carefully considered in the context of the government environment. The types of services provided introduce a different financial risk for each government. Therefore, information on the purpose of operations is relevant to users of financial statements (Risks and Uncertainties Disclosures, 2020).

Video Link: https://www.youtube.com/watch?v=7RzmiQnucwA

References

Governmental Accounting Standards Board. (2020, July). About the GASB. https://www.gasb.org/aboutgasb.

Governmental Accounting Standards Board. (2020, September 8). GASB Board Meeting - Tuesday September 8, 2020. YouTube. https://www.youtube.com/watch?v=7RzmiQnucwA.

Governmental Accounting Standards Board. (2020, September 8). Risks and Uncertainties Disclosures. Governmental Accounting Standards Board Project Page . https://www.gasb.org/jsp/GASB/GASBContent_C/ProjectPage.