GASB releases Technical Bulletin on derivatives disclosure. (News & Numbers).(Governmental Accounting Standards Board)(Brief Article)

In an effort to improve disclosures about the risks associated with derivative contracts, the Governmental Accounting Standards Board has released for public comment accounting guidance that would provide more consistent reporting by state and local governments. The proposed Technical Bulletin is intended to increase the publics understanding of the significance of derivatives to a government's net assets and the potential effects on future cash flows.

While state and local governments use a vast array of increasingly complex derivative instruments to manage debt and investments, they also may be assuming significant risks. Governments must communicate those risks to financial statement users, and the proposed Technical Bulletin would help clarify existing accounting guidance so that more consistent disclosures can be made across governments.