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Preparing for Risk: GASB-Style

In a day when one of the only sure things about the future of state and local finances is that they are unpredictable, a proposal issued by the Governmental Accounting Standards Board (GASB) earlier this summer is of particular interest.

Earlier this summer, the GASB issued an Exposure Draft, titled Certain Risk Disclosures. The project focuses on two categories of risk that could affect the level of services a government is providing or its ability to meet obligations when they come due.

The Board’s objective in this effort is to create disclosures which are intended to provide financial statement users with information about potential events and circumstances before a government experiences possible severe financial stress. This kind of transparent information can help provide the kind of information that’s vital to public sector leaders about the “what-ifs” of the future, to help inform their decision making and assessments of accountability.

For a video that highlights key aspects of this proposal click here. At the conclusion, you’ll find a link that will allow you to actually read the full proposal as well as an electronic input form on the proposal that makes it easy to share your thoughts with GASB by its September 30th deadline.


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