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Letter to GASB on accounting changes

August 31, 2021

Director of Research and Technical Activities
Project No. 32-1
Governmental Accounting Standards Board
401 Merritt 7, PO Box 5116 
Norwalk, CT 06856-5116  

Submitted via e-mail to [email protected]   

Re: Accounting Changes and Error Corrections  

Dear Director of Research and Technical Activities:  

The Virginia Society of CPAs (VSCPA) Accounting & Auditing Advisory Committee has reviewed the proposed Exposure Draft, Accounting Changes and Error Corrections, issued by the Governmental Accounting Standards Board (GASB). The VSCPA is a leading professional association dedicated to enhancing the success of all CPAs and their profession by communicating information and vision, promoting professionalism, and advocating members’ interests. The VSCPA membership consists of more than 13,000 individual members who actively work in public accounting, private industry, government and education. We appreciate the work the GASB has undertaken on this effort and the opportunity to respond to this proposed exposure draft.  

Overall, we support the Board’s decision to clarify guidance over accounting changes and error corrections to address diversity in practice as discussed in paragraph A3. Specifically, financial statement preparers often have an incentive to avoid classifying prior period adjustments as corrections of an error and adopt classifications that allow for prospective correction. In general, we believe clear and prescriptive guidance on these classifications will increase transparency and reduce the number of disagreements between preparers and their auditors regarding classification.  

We support the introduction of the category for changes to the financial reporting entity and believe that classification guidance is improved for all categories. However, we do suggest one enhancement regarding accounting estimates. Paragraph 7 provides that, “a change in an accounting estimate results from changes to the inputs of that estimate,” and goes on to say, “changes to inputs result from a change in circumstance, new information, or more experience.” We suggest additional guidance to follow to explicitly acknowledge that input errors, such as miscalculated or irrelevant data fields, constitute a correction of an error rather than a change in an input.   

Unless a breadth of potential financial statement users specifically requested the information during the Board’s pre-agenda research, we do not agree with the conclusion described in paragraph B41 that the benefits of new reconciliation disclosures of changes and errors by line item and reporting unit required in paragraph 32 will exceed the costs of preparing and auditing the information. We believe most users are primarily concerned with a high-level summary of what has changed and how it affected net position rather than the detailed disclosure examples provided in Appendix C.  

Again, the VSCPA appreciates the opportunity to respond to this Exposure Draft. Please direct any questions or concerns to VSCPA Vice President, Advocacy Emily Walker, CAE, at [email protected] or (804) 612-9428.  


Tamara Greear, CPA  
Chair, VSCPA Accounting & Auditing Advisory Committee  

2021-22 VSCPA Accounting & Auditing Advisory Committee 

Tamara Greear, CPA — Chair 
George Crowell, CPA — Vice Chair 
Zach Borgerding, CPA 
Scott Davis, CPA 
Bo Garner, CPA 
Joshua M. Keene, CPA 
Nick Kinsler, CPA 
Daniel Martin, CPA 
Michael Phillips, CPA 
Chris Smith-Christian, CPA 
Charles M. Valadez, CPA 
Natalya Yashina, CPA