Journal EntriesThis recurring website feature highlights articles from The GASB Report, the GASB’s monthly newsletter. The current article appeared in the June 2013 issue.
The Fair Value Measurement and Application Field TestThe GASB is soliciting participants for a field test it is conducting in conjunction with the issuance of a Preliminary Views in its Fair Value Measurement and Application project. All state and local governmental entities, including pension plans that administer pensions for state and local governments, are eligible and welcome to participate.
The GASB recently approved a Preliminary Views, Fair Value Measurement and Application, which proposes new accounting standards regarding which assets and liabilities should be measured at “fair value,” how that value should be determined, and what note disclosures should be included with fair value measures. The application of the Board’s proposed requirements in the Preliminary Views, if ultimately issued as a Statement, would enhance financial statement users’ ability to assess the government’s accountability and provide more decision-useful information.
Field tests are a part of the GASB’s due process activities and help the GASB to establish effective standards. Participating entities volunteer to go through the exercise of “implementing” the proposal as if it were in place and then provide feedback to the GASB regarding that process. Field tests point out potential problems related to the implementation of proposed standards and allow the GASB to gather valuable information about implementation costs.
GASB field tests can provide participants with a variety of benefits, not the least of which is being able to ask the GASB project staff questions regarding implementation issues. This gives participants a significant head start on implementation when the final standard is issued. The GASB publicly acknowledges the assistance of entities that participate in its field tests for those that wish to be acknowledged.
Those interested in being a part of the field test first participate in a pre-test interview. Afterward, a participating entity would apply the requirements of the proposal and answer certain related questions. It is expected that participants will have between six to eight weeks after the issuance of the Preliminary Views to complete the field test.
Entities interested in participating in the Fair Value Measurement and Application field test should contact GASB Project Manager Randy Finden either by e-mail at email@example.com or by telephone at (203) 956-5240.