GASB Seeks Feedback on Revenue and Expense Recognition Models
In its recently issued Invitation to Comment, Revenue and Expense Recognition, the Governmental Accounting Standards Board (“GASB”) requests feedback on a new revenue and expense recognition model. This comprehensive model would help state and local governments address various transactions and improve their comparisons of transaction accounting and reporting. The model will also provide financial report users more insightful information for making decisions and evaluating accountability.
The Invitation to Comment discusses the following two models:
- Exchange/Nonexchange Model: This model’s classification process is based on the current definition of exchange transactions. The model’s recognition process would rely on current guidance for nonexchange transactions and a standardized recognition method for exchange transactions.
- Performance Obligation/No Performance Obligation Model: This model’s classification process is based on a provisional definition of a performance obligation. The recognition process would keep the current guidance for transactions without a performance obligation, but it would also use a structured recognition method for transactions categorized as having a performance obligation.
Public hearings on this Invitation to Comment are planned. Details on these hearings are available in the Invitation to Comment.
Comments are due Friday, April 27.