Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Countries' updates - Scott Showalter, FASAB, United States

6 views

Published on

This presentation was made by Scott Showalter, FASAB, United States, at the 19th OECD Senior Financial Management and Reporting Officials Symposium held at the OECD Conference Centre, Paris, on 4-5 March 2019

Published in: Government & Nonprofit
  • Be the first to comment

  • Be the first to like this

Countries' updates - Scott Showalter, FASAB, United States

  1. 1. Do You Know Your Risk Assumed D. SCOTT SHOWALTER, CPA, CGFM CHAIRMAN, US FEDERAL ACCOUNTING STANDARDS ADVISORY BOARD 19TH ANNUAL OECD PUBLIC SECTOR ACCRUALS SYMPOSIUM
  2. 2. Disclaimer  Views expressed are those of the speaker.
  3. 3. Overview  What are risks assumed?  Why do they matter?  Challenges and options for reporting?
  4. 4. What Are Risks Assumed?  Earlier definition - Risk assumed is ..the risk inherent in the insurance or guarantee coverage in force. (SFFAS 5, par. 105)  Limited to insurance and guarantees.  Information provided about “expected losses” in the future but those losses were not recognized.
  5. 5. Examples
  6. 6.  Transparency – Considering how uncertainty might affect outcomes is important to understanding financial position and performance.  Completeness – Need to aggregate information that helps users weigh risks assumed by the central government as a whole. Why It Matters 11
  7. 7.  Operating Performance – cost of government actions and how costs are financed may be affected by risks and may create risks.  Risk may be assumed without immediately affecting the budget. Risk may accumulate over time.  Stewardship – how future budgetary resources will be affected.  Risk should be considered in assessing whether future budgetary resources are likely to be sufficient to sustain public services. Does it Help Meet Reporting Objectives? 13
  8. 8. Insurance programs are categorized based upon the type of revenue received as defined by Statement of Federal Financial Accounting Standards 7, Accounting for Revenue and Other Financing Sources and Concepts for Reconciling Budgetary and Financial Accounting This Statement identifies three categories: 1) exchange transaction insurance programs other than life insurance, 2) nonexchange transaction insurance programs, and 3) life insurance programs.
  9. 9. Next Steps  Assessing risk information gaps  Using the IMF’s Fiscal Transparency Code: Pillar III -Risk Analysis and Management, risk analysis and disclosure principles as a general framework.  Holding roundtables with users of information to identify information they use.  Assessing whether the needed information is (and should be) included in federal financial reports.  Coordinating with the US federal government’s efforts to adopt Enterprise Risk Management (ERM)
  10. 10. Additional Resources
  11. 11. Additional Resources
  12. 12. Challenges  Definition (what risks should be considered – explicit and/or implicit, risks all should be aware of or risks unique to the government)  Measurement  Overload of information
  13. 13. Current Thinking  Not likely to result in a specific measure of risk assumed  Changed project name to “risk reporting”  Develop principles for reporting financial and non- financial risks  Forward looking information  Events vs. effect on financial position and operations  Develop principles to reveal measurement uncertainty
  14. 14. Contact Information D. Scott Showalter, CPA, CGFM Chairman, FASAB +1.919.513.0526 scott_showalter@ncsu.edu www.fasab.gov

×