GASB renames financial report to avoid racist connotations

The Governmental Accounting Standards Board is changing the term "Comprehensive Annual Financial Report" to "Annual Comprehensive Financial Report" because the abbreviation is often pronounced the same way as a derogatory term.

GASB issued a pronouncement Tuesday to change the term after some of its stakeholders raised concerns that the acronym of the prior name of the report sounds like an offensive term for Black South Africans when spoken. The changes in the name and acronym were widely supported by individuals and stakeholder groups that responded to an exposure draft it issued in April proposing the changes (see story).

Awareness of racial justice issues has been growing in the accounting profession, especially after the protests last year over the killings of George Floyd and Breonna Taylor. While the term that GASB is seeking to rename may not evoke racist connotations as much in the U.S., it does sound like an ethnic slur that was often used in Africa, particularly in apartheid-era South Africa.

Courtesy of GASB

Statement No. 98, "The Annual Comprehensive Financial Report," establishes the annual comprehensive financial report and ACFR under GAAP for state and local governments and eliminates the prior name and acronym. Otherwise, no changes were made to the report’s structure or content.

“Once this issue came to our attention, it was clear that working with our stakeholders to rename this important document was simply the right thing to do,” said GASB Chair Joel Black in a statement Tuesday. “Thank you to everyone who worked with us and shared their input.”

Financial reports prepared in accordance with GAAP are required to contain basic financial statements (including notes to financial statements) and certain required supplementary information (such as management’s discussion and analysis). State and local governments can voluntarily present those required components in an ACFR, which also includes extra background and explanatory information from management, additional financial statements disaggregating certain columns in the basic financial statements, and a “statistical section” of 10-year trends in financial, economic, demographic, and operating information.

The requirements of Statement 98 take effect for fiscal years ending after Dec. 15, 2021, although GASB is encouraging earlier application of the new term to discourage the use of the earlier terminology.