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Circular A-134
May 20, 1993
TO THE
HEADS OF EXECUTIVE DEPARTMENTS AND AGENCIES
SUBJECT:
Financial Accounting Principles and Standards
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Purpose.
This Circular establishes the policies and procedures for
approving and publishing financial accounting principles and
standards. It also establishes the policies to be followed
by Executive Branch agencies and OMB in seeking and providing
interpretations and other advice related to the standards.
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Background.
The Secretary of the Treasury, the Director of the Office
of Management and Budget (OMB), and the Comptroller General
of the United States ("the Principals") established the Federal
Accounting Standards Advisory Board (FASAB) in October 1990
by a memorandum of understanding (MOU). The role of FASAB
is to deliberate upon and make recommendations to the Principals
on accounting principles and standards for the Federal Government
and its agencies. The MOU states that if the Principals agree
with the recommendations, the Comptroller General and the
Director of OMB will publish the accounting principles and
standards.
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Coverage.
The provisions of this Circular apply to all Executive Branch
departments and agencies.
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Definitions.
As used in this Circular:
a.
Executive agency ("agency") means any executive branch
department, independent commission, board, bureau, office,
agency, or other establishment of the Federal Government,
including independent regulatory commissions and boards.
It does not include federally-owned or controlled corporations
that are preparing financial statements in accordance with
generally accepted accounting principles promulgated by
the Financial Accounting Standards Board, or the legislative
or judicial branches of the Federal Government.
b. Accounting standards or principles are those conventions,
rules, and procedures necessary to define acceptable accounting
practice at a particular time. Accounting standards include
broad guidelines of general application and may also include
detailed practices and procedures.
c. Interpretation of Federal Financial Accounting Standards
is a document of narrow scope that provides clarifications
of original meaning, additional definitions, or other guidance
pertaining to an existing Statement of Federal Financial
Accounting Standards (SFFAS).
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Policy.
a.
FASAB Recommendations. The Director of OMB will review
each statement of accounting principles, standards, or concepts
recommended by FASAB and decide upon the appropriateness
of the statement and its desirability for the Federal Government.
If a recommended statement of accounting principles or standards
is agreed to by the Director, the Secretary of the Treasury,
and the Comptroller General, the Director will issue a SFFAS,
signed by the Director. Each SFFAS, or a notice of its availability,
will be published in the Federal Register and distributed
throughout the Federal Government.
b. Status of the SFFASs. SFFASs shall be considered
generally accepted accounting principles (GAAP) for Federal
agencies. Agencies shall apply the SFFASs in preparing financial
statements in accordance with the requirements of the Chief
Financial Officers Act of 1990. Auditors shall consider
SFFASs as authoritative references when auditing financial
statements.
c. Interpretations of the SFFASs. Agencies and individuals
desiring guidance relative to the standards shall request
such guidance from OMB, to the attention of the Office of
Federal Financial Management. OMB will respond to the request
by providing technical assistance, unless it decides that
the response should be an Interpretation of Federal Financial
Accounting Standards. In that event, OMB will provide written
copies of the request to the Comptroller General and the
Secretary of the Treasury; examine, as appropriate, applicable
literature and consult with knowledgeable persons; draft
an Interpretation of Federal Financial Accounting Standards;
consistent with the intent of the MOU, obtain the consensus
of Treasury and GAO on the interpretation; and publish the
Interpretation of Federal Financial Accounting Standards.
Interpretations of Federal Financial Accounting Standards
will be signed by the Director or Deputy Director for Management,
acting in the capacity of chief official responsible for
financial management in the United States Government. Also,
the Comptroller General and Secretary of the Treasury may
publish a response.
d. Applicability to Budget Execution. The SFFASs
shall have no effect on the manner in which agencies budget
for, monitor and control the expenditure of budgetary resources.
Those requirements are defined in OMB Circulars A-11 and
A-34 and other OMB documents.
e. Other Directives. OMB may, from time to time,
issue other instructions to the agencies regarding accounting
and/or financial reporting.
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Inquiries.
For information concerning this Circular, contact the Financial
Standards and Reporting Branch, OFFM, telephone 202-395-3993.
Leon E.
Panetta
Director
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