Abstract: * Readers of the JOURNAL can now look forward to this special column, in which Martin Ives will share his insights on developments in government financial management. Mr. Ives has dedicated much of his career to achieving sound financial management, having served as the first Deputy Comptroller of New York City and as Comptroller of the State of New York. Most recently, Mr. Ives served as Vice Chair of the Governmental Accounting Standards Board (GASB), a position he held for 10 years. He currently serves as a member of the Federal Accounting Standards Advisory Board. A long-time member of AGA, Mr. Ives has been honored many times by the Association, including the Lifetime Achievement Award from the AGA Education and Research Foundation, and the Andy Barr Award which recognizes an outstanding financial executive in the private sector, which will be presented to him at the Federal Leadership Conference this February. Mr. Ives is now serving AGA in another capacity, as a member of the Professional Certification Board. He is a CPA, a CIA, and now a Certified Government Financial Manager, and will serve on the Board through October 31, 1996. AGA is delighted to have Mr. Ives as a featured columnist. and we hope you enjoy hearing his perspectives on where we should be headed in government financial management. Governmental Accounting Standards Board (GASB) is currently developing a new financial reporting model for state and local governments. This project has taken on added significance because of the recent announcement by the Securities and Exchange Commission that municipal bonds cannot be underwritten unless the municipalities agree to issue annual financial reports and report on important changes in their financial condition. The way in which the financial reporting model is developed will affect how the GASB's two most fundamental pronouncements are implemented. They are Concepts Statement on financial reporting objectives, and Statement 11 on the measurement focus and basis of accounting for governmental fund operating statements. The indefinite delay of Statement 11, pending completion of the financial reporting project, makes completing the reporting project a matter of urgency. (The investor community, among others, had urged the GASB not to delay implementing Statement 11, which was originally scheduled to be effective in 1994). The GASB issued an Invitation to Comment on two alternative financial reporting models in June, 1994, and is currently reviewing the comments. Ultimately, the Board will select a particular model (which may differ from the two proposals) and expose it for comment. This article attempts to provide a perspective on what a new financial reporting model needs to achieve if it is to convey useful information to external users of financial reporting--not only the investor community but also the citizenry and legislative and oversight bodies. Focusing on what the model needs to achieve will, I hope, help the reader to develop views on the issues and to communicate them to the GASB. (Having served on the Board for 10 years, my own views are no secret. I voted for Concepts Statement 1 and Statement 11, dissented in the decision to delay the implementation date of Statement 11, and supported the second of the two proposed reporting models). I start with the premise that governmental financial reporting needs to communicate, among other things, information about an entity's performance. A financial report must deliver a message to the reader about whether the entity was better or worse off as a result of the year's operations. Measuring performance is a fundamental responsibility of the accountant. It is central to business enterprise financial reporting and, as a result of Concepts Statement 1, also central to governmental financial reporting. I also start with the premise that the message about performance must be delivered clearly, because not all readers of governmental financial reports can be expected to be certified financial analysts. …
Publication Year: 1995
Publication Date: 1995-01-01
Language: en
Type: article
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Cited By Count: 1
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