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New report highlights developments in accounting standards

The new Financial Accounting Foundation report highlights

The Financial Accounting Foundation has released its 2011 overview of American accounting, which includes a breakdown of the activities and developments of the Federal Accounting Standards Board and the Governmental Accounting Standards Board.

"High quality financial reporting is critical to the efficient operation of U.S. capital markets and the growth of the U.S. economy - and to the ability of taxpayers to assess how well their elected officials are spending their tax dollars," wrote John Brennan and Teresa Polley, chairman and CEO, respectively, of FAF. "But high quality financial reporting doesn’t just happen. It is built on a foundation of high quality accounting standards that result in reliable, relevant, comparable, and consistent financial information. High quality standards meet the needs of investors and taxpayers, as well as those who prepare and audit the financial statements of public and private companies, not-for-profits, and state and local governments."

During 2011, the GASB issued two final Statements of Governmental Accounting Standards. One of those standards clarifies where "deferred amounts should appear in a new statement of net position," while the other changes certain standards to address governmental concerns over derivatives that have become ineffective due to external influences.

There are a number of developments in the works that CFOs should keep an eye on, according to the report. There will be a decision on the private company plan in the coming months, and many accounting standards agencies will be hard at work implementing the plan during the second half of the year. FAF will also be monitoring developments with the International Financial Reporting Standards.