GASB Issues Survey of Users of Government Financial Statements
7/18/2016
NASACT
Indicators of Severe Financial Stress and Going Concern Disclosures
Monday, July 18, 2016
by: NASACT

Section: NASACT




The Governmental Accounting Standards Board has issued a survey to research the effectiveness of indicators of severe financial stress of state and local governments. The survey is intended to gather feedback on these broad questions:
 
  • What criteria might achieve the objective of disclosing severe financial stress uncertainties with respect to governments?
  • What information do financial statement users need with respect to the disclosure of severe financial stress uncertainties?
  • Are the going concern indicators currently presented in note disclosures appropriate for state and local governments under severe financial stress? 

This survey is part of GASB's project Going Concern Disclosures: Reexamination of Statement 56.

The objective of this research is to evaluate whether the existing GASB authoritative literature has provided preparers of financial statements for state and local governments sufficient guidance about management’s responsibilities for evaluating and disclosing uncertainties associated with severe financial stress (what is now referred to as “going concern” uncertainties). The research will provide the Board with the information it requires to consider the need for revisions to existing disclosure standards, which would be intended to reduce existing diversity in note disclosures and to more effectively meet financial statement user needs.
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