FASAB aims to update MD&A for federal accounting

The Federal Accounting Standards Advisory Board issued a proposal Thursday to update the guidance for the management's discussion and analysis section of financial reports by federal government agencies.

This proposed update aims to provide a comprehensive set of standards to guide managers on how to present an MD&A that's balanced, concise and understandable about the reporting entity's:

• Organization and mission;
• Financial position and condition;
• Operating performance, opportunities, and risks; and,
• Systems, internal controls, and compliance with applicable laws and regulations. 

"This proposal would provide more flexibility for reporting MD&A, reduce preparer burden and redundancy, and enhance transparency," said FASAB chairman George Scott in a statement. 

Andrew Harrer/Bloomberg

It would take a principles-based approach while merging and updating the content from some of FASAB's existing standards, SFFAC 3 and SFFAS 15.

FASAB is asking for comments by Dec. 7, 2023, along with reasons for their positions from commenters. The exposure draft and specific questions about it are available on FASAB's website.