PSC Provides Feedback on GASB Discussion Memorandum on Structure for Communicating GAAP for State and Local Governments

TXCPA's Professional Standards Committee provided feedback to GASB on the Discussion Memorandum (DM), The Structure for Communicating Generally Accepted Accounting Principles for State and Local Governments. In the letter, the PSC generally supports GASB’s proposal to move to a single-authority GAAP structure using a Codification as the sole authoritative source. The committee believes this approach would improve accessibility, reduce complexity, eliminate potential conflicts between sources, and lessen the risk that practitioners rely on outdated or superseded pronouncements.

The PSC favors maintaining a user-friendly Codification that includes both browsing and search capabilities, limited duplication of guidance when it enhances usability and the current organization of Category A GAAP. The committee recommends keeping Category B GAAP within relevant topical sections while clearly distinguishing it from Category A guidance.

To communicate future changes, the PSC supports using nonauthoritative stand-alone documents alongside pending content. These documents should include summaries, background information and basis-for-conclusions material to help users understand the Board’s reasoning and the application of new guidance.

Finally, the PSC emphasized the importance of a practical transition plan if GASB adopts a single-authority Codification. Recommended resources include mapping tables from original pronouncements to Codification sections, enhanced search tools, user guides, educational materials and implementation examples to help practitioners adapt efficiently to the new structure.

Learn more here. Read the Discussion Memorandum here. View TXCPA PSC comment letter here.