NEWS RELEASE 06/05/06

GASB to Hold Public Hearing on Accounting and Financial Reporting for Derivatives

Norwalk, CT, June 5, 2006—In line with its commitment to open and rigorous due process, the Governmental Accounting Standards Board (GASB) will hold a public hearing on its Preliminary Views (PV) document, Accounting and Financial Reporting for Derivatives, which was released on April 28, 2006. The hearing is scheduled for June 21, 2006, at the San Diego Marriott Hotel and Marina, San Diego, California, beginning at 9:00 a.m. It will be held in conjunction with the annual professional development conference of the Association of Government Accountants.

Individuals or organizations that want to make an oral presentation at the public hearing should provide to the GASB, by June 9, 2006, a written notification of that intent and a copy of written comments addressing the issues discussed in the PV. Individuals or organizations may participate in person or by phone. Those not wishing to participate in the public hearing are welcome to attend as observers.

The PV proposes that the fair value of derivatives be reported in the financial statements as well as the change in that fair value. If, however, a derivative is effectively hedging (reducing) the risk it was created to address, then the annual changes in the derivative’s fair value would be deferred and reported in a government’s balance sheet. Governments also would disclose additional information about their derivatives in the notes to the financial statements.

Written comments from individuals or organizations that do not intend to participate in the public hearing should be sent to the GASB by July 28, 2006.

Additional information about submitting a response or a request to speak at the hearing is included in the Preliminary Views document, which is available on the GASB’s website at www.gasb.org.

About the Governmental Accounting Standards Board

The GASB is the independent, not-for-profit organization formed in 1984 that establishes and improves financial accounting and reporting standards for state and local governments. Its seven members are drawn from the Board’s diverse constituency, including preparers and auditors of government financial statements, users of those statements, and members of the academic community. More information about the GASB can be found at its website www.gasb.org.