Revamping MD&A Reporting: FASAB Proposes Streamlined Standards for Federal Financial Reports

Posted on September 15, 2023 by Editor

The Federal Accounting Standards Advisory Board (FASAB ) has proposed new standards for Management’s Discussion and Analysis (MD&A) in federal financial reports.

These standards aim to streamline and enhance the effectiveness of MD&A reporting for federal entities presenting general-purpose federal financial reports (GPFFRs) in accordance with generally accepted accounting principles (GAAP).

The proposed MD&A standards seek to provide a more comprehensive and integrated view of a reporting entity’s financial position, financial condition, operating performance, opportunities, and risks. They emphasise the need for a balanced, concise, integrated, and understandable MD&A presentation.

The improvements include eliminating prescriptive MD&A sections for greater flexibility, reducing redundancy, and easing the reporting burden. The proposed standards also focus on the integration of costs and performance results to provide a complete picture of a reporting entity’s financial and operating performance.

The MD&A objectives and framework were tested through an agency pilot program, resulting in significant reductions in the length of MD&A reports, making them more concise and user-friendly. The proposed standards aim to enhance the understandability and usefulness of MD&A information for end users.

These proposed MD&A standards are expected to improve the transparency and accessibility of financial information in federal reporting, aligning with the broader goals of FASAB to enhance financial reporting standards.

You should take our suggestion that these disclosures transition to Inline XBRL as read.

Read the proposal and find out how to submit comments here.

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