Advisory Board Proposes Federal Financial Accounting Standards for Insurance

The Federal Accounting Standards Advisory Board has released an exposure draft of a proposed Statement of Federal Financial Accounting Standards on insurance programs for the federal government.

FASAB is proposing to establish three categories of insurance and related guidance: exchange transactioninsurance programs other than life insurance, nonexchange transaction insurance programs, and life insurance programs. The new standards aim to provide more concise, meaningful and transparent information on insurance program costs and liabilities,

“The board is seeking to improve federal financial reporting and to better inform readers about the operating performance of insurance programs and the risk of loss to the federal government from adverse events,” said FASAB chairman Tom Allen in a statement.

The proposal would rescind the existing standards for insurance and guarantee programs in SFFAS 5, “Accounting for Liabilities of The Federal Government,” paragraphs 97-121.

FASAB is asking for comments on the exposure draft by March 29, 2016.