Response to the GASB's Invitation to Comment on Revenue and Expense Recognition: Project No. 4-6I
ABSTRACT The objective of the Governmental Accounting Standards Board's (GASB) Revenue and Expense Recognition Project is to develop a comprehensive model for classification, recognition, and measurement of revenues and expenses for governmental entities. A conceptual framework would provide a basis for evaluating revenue and expense recognition, provide guidance regarding exchange and exchange-like transactions that have not been specifically addressed, and improve the consistency of financial reporting for decision making and the assessment of accountability. The GASB issued an Invitation to Comment (ITC No. 4-6I) in January 2018 to seek feedback regarding the classification and recognition of revenue and expense transactions, excluding the issue of measurement as it will be addressed in a subsequent phase of the project. The GASB proposed two models developed by a task force at an earlier stage in the project: an exchange/nonexchange model and a performance obligation/no performance obligation model. This commentary provides the response submitted to the GASB from the Accounting and Auditing Standards Committee of the Governmental and Nonprofit Accounting Section of the American Accounting Association. In addition, directions for future research are discussed. Data Availability: Details regarding the GASB project can be found on its website at: https://www.gasb.org/jsp/GASB/Document_C/DocumentPage?cid=1176169978401&acceptedDisclaimer=true