New interpretation of debt cancellation proposed under federal accounting standards

Cecilia Nysing

The Federal Accounting Standards Advisory Board is looking for input on a proposed interpretation of the federal financial accounting standards for debt cancellation.

The proposed interpretation would clarify that debt cancellation is a nonexchange activity that should be reported on the statement of changes in net position, or SCNP. It would also clarify that Paragraph 313 of the existing standard, Statement of Federal Financial Accounting Standards 7, should not be interpreted to require that a particular line item “gain” or “loss” be displayed on the SCNP.

Along with proprietary accounting and reporting issues, budgetary accounting should be considered, FASAB pointed out, and as noted in Paragraph 313 of SFFAS 7, the cancellation of debt would require an act of Congress. Each debt cancellation is governed by the particular language used in the specific legislation that cancelled the debt. This proposed interpretation would not provide guidance on budgetary accounting, which is issued by central agencies.

The proposed changes come at a time when the Biden administration and Democrats in Congress have proposed canceling student loan debt, much of which is funded by the federal government. While Biden has called for canceling up to $10,000 in student loan debt, some progressives are pushing for him to go further with forgiveness of up to $50,000 in debt. However, student debt forgiveness wasn’t included in the administration’s proposed budget, according to CNBC.

Neither FASAB’s proposed interpretation, nor the original SFFAS 7, specifically addresses student loan debt cancellation, so it’s unclear if the rules would apply to student loan forgiveness. FASAB said the proposed interpretation would mostly clarify the rules and make them more consistent. “The proposed interpretation provides clarification that will facilitate consistent reporting of debt cancellation on the SCNP,” said FASAB Chairman George Scott in a statement Tuesday.

FASAB is asking for comments on the exposure draft by July 23 and would like respondents to provide the reasons for their positions. The exposure draft and the specific questions raised are available on the FASAB website in PDF and Microsoft Word format here.

Next Post

Integrating Corporate Social Responsibility Into Your Marketing Plan

As people’s social and environmental awareness grew, the term Corporate Social Responsibility (CSR) became widely discussed in corporations and consumer groups. Corporations started committing to CSR in order to leave a more positive impact on their communities, while consumers considered CSR an important factor in their purchasing decisions. But what is […]
Situs judi online Hsobet terpercaya

Link daftar Liga228 agen bola terpercaya paling aman yang selalu menjaga kenyamanan para bettor.

Situs sbobet resmi terpercaya. Daftar situs slot online gacor resmi terbaik. Agen situs judi bola resmi terpercaya. Situs idn poker online resmi. Agen situs idn poker online resmi terpercaya. Situs idn poker terpercaya.

situs idn poker terbesar di Indonesia.

List website idn poker terbaik. QQCuan Slot Gacor Hari Ini

Situs agen slot terpercaya dan resmi

slot hoki gacor

slot terpercaya

slot gacor hari ini

sbobet online


slot gacor Situs Slot Online Online Terpercaya