Revamping MD&A Reporting: FASAB Proposes Streamlined Standards for Federal Financial Reports
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.
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Read the proposal and find out how to submit comments here.