The Governmental Accounting Standards Board (GASB) is looking for participants to field test its recently released Preliminary Views, Revenue and Expense Recognition.
The revenue and expense recognition project is one of GASB’s most significant projects and will change how governmental entities evaluate, categorize, measure, and report these major financial statement elements. Field tests are an important part of the GASB’s new guidance process. Interested public institutions will go through an exercise of evaluating transactions within the context of the proposed revenue and expense model, with the support of GASB staff.
The GASB’s objective is to gather feedback on:
- Potential implementation difficulties
- The costs associated with the initial and ongoing implementation of the proposed standards
- Whether any of the proposed requirements are unclear
This is an essential way for public higher education to have input and perhaps influence guidance based on the uniqueness of college and university transactions. For example, the following are extensive activities that are fairly unique to public higher education: sponsored research, clinical trials, student financial aid, contributions, public-private partnerships, radio or other public broadcasting enterprises, cooperative activities, athletics, tuition and residential contracts, community education, performing arts agreements, and so forth. All feedback will be considered by the board when discussing an exposure draft of a proposed final standard.
In order to provide flexibility, two identical field tests will be conducted: the first between September and December 2020 and the second from December 2020 through March 2021. A fact sheet describing the benefits of participating in a field test and what participation involves is available on the GASB website. Interested public institutions, or those with questions, should contact GASB Supervising Project Manager Pam Dolan.