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States, cities reveal risk details, accounting rule uncovers transparency.

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TLDR:

  • State and local governments will be required to disclose more details about risks in their financial statements.
  • The Governmental Accounting Standards Board has published new accounting rules, GASB Statement No. 102.
  • The new rules aim to make governments identify and disclose risks related to revenue concentration and spending constraints.

State and local governments will have to provide more information about the risks associated with revenue concentration and spending constraints in their financial statements, due to new accounting rules published by the Governmental Accounting Standards Board (GASB). Currently, governments are only required to disclose risks such as interest and credit risk, but the new rules aim to make governments identify and disclose other risks as well. GASB Statement No. 102 requires governments to provide more details about the risks of relying on too few sources of revenue and the limits on their ability to control spending. By disclosing these risks, it is expected that the financial statements of state and local governments will provide a clearer picture of their financial health and potential vulnerabilities.

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