Government Financial Strain Accounting Project Set for Input (1)

Local governments grappling with fears they won’t be able to meet their financial obligations could gain clarity on how to report those dire conditions in a project advanced by a US accounting standard-setter.

The Governmental Accounting Standards Board voted Wednesday to issue an early-stage project aiming to improve financial reporting guidance for state and local governments facing potential insolvency. The forthcoming plan, called a “preliminary views” document, will be released for public comment.

GASB aims to refine the definition of and criteria related to severe financial stress, as well as identify when governments should disclose their exposure to those conditions. ...