01-26164. Notice of Issuance of Statement of Federal Financial Accounting Standards

AGENCY:

Federal Accounting Standards Advisory Board.

ACTION:

Notice of New Statement of Federal Financial Standards No. 21, Reporting Corrections of Errors and Changes in Accounting—Amendment of SFFAS 7, Accounting for Revenue and Other Financing Sources.

Board Action: Pursuant to the Federal Advisory Committee Act (Pub. L. No. 92-463), as amended, and the FASAB Rules of Procedure, as amended in October, 1999, notice is hereby given that the Federal Accounting Standards Advisory Board has published a Statement of Federal Financial Standards No. 21, Reporting Corrections of Errors and Changes in Accounting Principles—Amendment to SFFAS 7, Accounting for Revenue and Other Financing Sources. The Board approved the Statement in December 2000, and submitted it to FASAB principles for a 90-day review. The review period ended October 16, 2001.

A summary of the proposed Statement follows:

I. On October 16, 2001, the Federal Accounting Standards Advisory Board released Statement of Federal Financial Standards (SFFAS) No. 21, Reporting Corrections of Errors and Changes in Accounting Principles—Amending SFFAS 7, Accounting for Revenue and Other Financing Sources. The Chairman of the Federal Accounting Standards Advisory Board (FASAB) announced that the FASAB has issued a standard amending the reporting requirements for errors, discovered in the current year, that would have materially affected prior year financial statements. The amended standard required that adjustments be recognized as a change in cumulative results of operations (rather than as an element of net results of operations for the period) and that prior period financial statements not be restated for prior period adjustments recognized in the current period. The amendment requires that, when material errors are discovered in prior year financial statements, all statements presented must be restated to correct the error. The primary reason for the amendment is to allow reporting entities to present comparative statements. The Board has retained the requirement that prior period financial statements not be restated for changes in accounting principles, unless otherwise specified in the transition instructions section of a new FASAB standard. The language addressing the requirements, however, has been revised to improve clarity and to require certain disclosures.

II. The standards prescribed in SFFAS No. 21 are effective for periods beginning after September 30, 2001 with earlier implementation encouraged. Hard copies of SFFAS No. 21 will be mailed to FASAB's mailing list subscribers. Additionally, it will be in available on FASAB's home page http://www.financenet.gov/​fasab.htm. Copies can be obtained by contacting FASAB at [phone], or [e-mail].

FOR FURTHER INFORMATION CONTACT:

Wendy Comes, Executive Director, 441 G St., NW., Room 6814, Washington, DC 20548, [phone], or Andrea Palmer at [phone].

Authority: Federal Advisory Committee Act, Pub. L. No. 92-463.

Dated: October 16, 2001.

Wendy M. Comes,

Executive Director.