GASB Issues Financial Instruments Omnibus Proposal
July 30, 2009
The Governmental Accounting Standards Board (GASB) has issued an exposure draft entitled "Financial Instruments Omnibus." The proposed statement on financial instruments is intended to update and improve existing standards regarding financial reporting and disclosure requirements of certain financial instruments for which significant issues have been identified in practice. Comments are due to GASB by October 30, 2009.
Several GASB pronouncements have addressed accounting and financial reporting for financial instruments. Since the issuance of GASB Statements No. 25, "Financial Reporting for Defined Benefit Pension Plans and Note Disclosures for Defined Contribution Plans"; No. 31, "Accounting and Financial Reporting for Certain Investments and for External Investment Pools"; No. 43, "Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans"; and No. 53, "Accounting and Financial Reporting for Derivative Instruments," various issues have arisen in practice regarding certain financial instruments.
The amendments proposed in the exposure draft would:
- Extend the use of fair value measurement to unallocated insurance contracts to improve the consistency of reporting by pension and OPEB (other postemployment benefits) plans
- Emphasize the applicability of Securites and Exchange Commission requirements to certain external investment pools-known as 2a7-like pools-to provide practitioners with improved guidance
- Limit interest rate risk disclosures for investments in mutual funds to bond mutual funds to eliminate disclosures that may not provide decision-useful information
- Address the applicability of Statement No. 53, "Accounting and Financial Reporting for Derivative Instruments," to certain financial instruments to clarify which financial instruments are within the scope of that standard and provide greater consistency in financial reporting
The proposed statement would be effective for periods beginning after June 15, 2010 - fiscal 2011 for the vast majority of public institutions.
Director, Accounting Policy
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