mannharrison3077

On December 22, 2004, the Government Accounting Standards Board (GASB) released Changes to General Financial Securing Rule (GFRR). This rule required non-budgeted, non-URM vendors to submit financial statements or an opinion on revenue recognition with regards to the purchase of goods and services. The damp rate was cited as being a cause of significant revenue erosion for vendors as they were required to perform a material independently. Weeks before the rule was to have its final effective date, GASB held a conference and asked the public for comments on the rule (P regist memo; located at GASB web site). This memo received over 11,000 comments, which pointed to the fact that the problems in GFRR could not be attributed entirely to GASB. Some of the comments committed speculations on the motive for GASB to write GFRR - GASB itself was also speculating for several days that the intent of the rule was not to target budgeting contractors, but rather to improve overall financial reporting.

The final rule passed has resulted in an industry with much more informed private sector accountants. This has resulted in for up to 23% of quarterly reported revenue being "indirected" to the general ledger budgets. https://sio2interactive.com Eventually it was said that the rule was in place to make it easier for GASB to audit indirect means of revenue, but what legitimate reason? If a company that pays the vendor company $500.00 in EOB placed a bill in the general ledger that would result in GASB reporting $750.00 as a direct expense, instead of being asked to report it as an indirect expense. To be qualified to receive a transfer on the direct expense item, the entity needs to be audited to show it fulfilled the acquisition requirements as stated in the Transfer of admitille applyo. That means the subsidiary of the parent company must have to have filed financial statements with the relevant government agencies prior to the transfer date. This is assuming that companies have done their unpaid diligence,Have maintained accurate books and records as required by the FASB GL;doing a financial statement from and after the benefiant date.

It may seem obvious to you that GASB is looking to capture as much revenue as possible as so they could meet their agenda, but the industry expects service providers and vendors to be more forthcoming in their financial statements. GASB is most comfortable with complete transparency in financial Statements especially when it comes to financial statements for taxes and audit protection. Suppliers and vendors are a huge part of the budgeting process and taking all the major companies to task for their entirety is huge loss of revenue to the economy, when the reporting is made on a broader basis, lessens that loss. In addition to GASB requirements, I believe this rule will require long-term vendors and service providers to make a strong commitment on achieving a unnatural percentage of revenue being reported as cost-corrected revenue.

This will most likely affect small companies with less advanced auditing skills, because it becomes so difficult to foresee what GASB will require when you are to be audited. While this is a little risk-takers attitude and should be viewed as a roadblock to companies expanding their level of current financial reporting efforts, I believe that the rule is so broad and impossible to predict what GASB will require of subcontracted service providers and vendors. I believe that even if GASB believes their need for an audit protection system is substantial, it will be difficult for GASB to also emerge from the audits unscathed.

It is estimated that the concept of audited results will only be imposed in five countries to date: Canada, the United States, the United Kingdom, Europe and Australia.

There is a strong chance that audited results can be Printing Forwarded as opposed to "re-pected" Board of Trade reports, since if they are Printing Forwarded this can be done with "pre-ASA" standards and features to ensure the integrity of the reports.

For small companies, such as for outsourcing companies, GERS would be helpful for establishing trend analysis in the market place. This would allow the fair billing of their costs for services provided. I think small companies can benefit greatly from this type of reporting; after all, a busy service provider with a host of clients can not give their clients the luxury of privacy and confidentiality at all. The paradigm would not work without extensive use of this tool to confirm cost efficiency and results for both small and large service provider clients.

Needless to say, having an accurate methodology in place for accurate financial reporting is very important. The key value of this is to allow the GASB to provide accurate information to their stakeholders, and for them to demand the most from vendors providing services to their clients.