This would include pension obligations, and would accompany the firm’s financial statements as required supplementary information.
GASB said the objective of this requirement is to better enable taxpayers, bond holders and other interested parties to assess a government’s financial health.
In a Preliminary Views document, the GASB indicated the following information is necessary to assist users in assessing a government’s economic condition:
- Projections of cash inflows and cash outflows, with explanations of the known causes of fluctuations;
- Projections of the financial obligations, including bonds, pensions, other post employment benefits and long-term contracts, with explanations of the known causes of fluctuations; and
- Projections of annual debt service payments, including principal and interest Narrative discussion of governments’ dependencies on other governments to provide its services.
The GASB proposed financial projections should be based on current policy, informed by historical information, and adjusted for known events and conditions that will affect the government’s finances during the projection periods. Governments would be required to present projections for at least the next five fiscal years. The projections would be reported as required supplementary information following the notes to the financial statements.
The GASB is seeking public comment on the Preliminary Views through March 16, 2012.The full text of the Preliminary Views is available for download here.
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