Statement of Federal Financial Accounting Standards 28 

January 6, 2005 

Deferral of the Effective Date of Reclassification of the Statement 

of Social Insurance: Amending SFFAS 25 and 26 

Federal Accounting Standards Advisory Board 
THE FEDERAL ACCOUNTING STANDARDS ADVISORY BOARD 

The Secretary of the Treasury, the Director of the Office of Management and

Budget (OMB), and the Comptroller General, established the Federal Accounting

Standards Advisory Board (FASAB or “the Board) in October 1990. FASAB is

responsible for promulgating accounting standards for the United States

Government. These standards are recognized as generally accepted accounting

principles (GAAP) for the Federal Government. 

An accounting standard is typically formulated initially as a proposal after

considering the financial and budgetary information needs of citizens (including the

news media, state and local legislators, analysts from private firms, academe, and

elsewhere), Congress, Federal executives, Federal program managers, and other

users of Federal financial information. The proposed standards are published in an

Exposure Draft for public comment. In some cases, a discussion memorandum,

invitation for comment, or preliminary views document may be published before an

exposure draft is published on a specific topic. A public hearing is sometimes held

to receive oral comments in additional to written comments. The Board considers

comments and decides whether to adopt the proposed standard with or without

modification. After review by the three officials who sponsor FASAB, the Board

publishes adopted standards in a Statement of Federal Financial Accounting

Standards. The Board follows a similar process for Statement of Federal Financial

Accounting Concepts, which guide the Board in developing accounting standards

and formulating the framework for Federal accounting and reporting. 

Additional background information is available from the FASAB or its website: 

♦ “Memorandum of Understanding among the General Accounting Office, the

Department of the Treasury, and the Office of Management and Budget, on

Federal Government Accounting Standards and a Federal Accounting

Standards Advisory Board” 

♦ “Mission Statement: Federal Accounting Standards Advisory Board” 

Exposure drafts, Statements of Federal Financial Accounting Standards 

And Concepts, FASAB newsletters, and other items of interest are posted 

On FASAB’s website at: www.fasab.gov. 

Federal Accounting Standards Advisory Board 

441 G Street, NW, Suite 6814 

Mail stop 6K17V 

Washington, DC 20548 

Telephone 202-512-7350 

FAX – 202-512-7366 

www.fasab.gov
Table of Contents 

Summary.......................................................................................................................... i

Introduction ..................................................................................................................... 1

Standards........................................................................................................................ 2

Appendix A: Basis for Conclusions ................................................................................. 3

Appendix B: SFFAS 26 ................................................................................................... 5

Appendix C: Abbreviations.............................................................................................. 6
Summary 

This standard defers for one year the effective dates of Statement of Federal Financial 

Accounting Standards (SFFAS) 25, Reclassification of Stewardship Responsibilities and 

Eliminating the Current Services Assessment, as well as SFFAS 26, Presentation of 

Significant Assumptions for the Statement of Social Insurance: Amending SFFAS 25. 

The provisions of these standards will be effective for periods beginning after 

September 30, 2005. 
Introduction 1

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____________________________________________________________________________________ 

Federal Accounting Standards Advisory Board 

Deferral of the Effective Date of Reclassification of the Statement of Social Insurance: Amending SFFAS 

25 and 26 

January 6, 2005 

Introduction 

1. In July of 2003, the Board issued SFFAS 25, Reclassification of Stewardship 

Responsibilities and Eliminating the Current Services Assessment. SFFAS 25 

requires that the Statement of Social Insurance (SOSI) be presented as a basic 

financial statement. SFFAS 261

, Presentation of Significant Assumptions for the 

Statement of Social Insurance: Amending SFFAS 25, requires disclosure of 

significant assumptions underlying the SOSI. Both statements were to be 

effective for periods beginning after September 30, 2004. 

2. Three federal agencies – the Office of Management and Budget (OMB), the 

Social Security Administration (SSA) and the Department of Health and Human 

Services (HHS) -- requested that the implementation of SFFAS 25 and 26 be 

deferred for one year. Each agency cites the fact that audit guidance was not 

finalized in time to support the original implementation date. 

3. While noting the importance of reclassifying SOSI and related disclosures, the 

Board agrees that the current effective date is not feasible in light of the delayed 

audit guidance. Therefore, the effective date is deferred for one year. For ease of 

reference, Appendix B presents the text of SFFAS 26 as amended by this 

standard.

 

1

 The relevant text of SFFAS 26 marked with amendments is presented as Appendix B. 
Standards 2

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____________________________________________________________________________________ 

Federal Accounting Standards Advisory Board 

Deferral of the Effective Date of Reclassification of the Statement of Social Insurance: Amending SFFAS 

25 and 26 

January 6, 2005 

Standards 

Amendment of SFFAS 25 

4. Par. 7 of Statement of Federal Financial Accounting Standards (SFFAS) 25 is 

amended as follows: 

Chapter 8 and paragraphs 14-16 of SFFAS 8 are rescinded, as is the associated 

illustration of the Current Services Assessment in Appendix B of SFFAS 8, effective 

for reporting periods beginning after September 30, 2002. Information about Risk 

Assumed shall be presented as RSI for reporting periods beginning after September 

30, 2002. The information required by paragraphs 27(3) and 32(3) of SFFAS 17 

shall be presented as a basic financial statement for periods beginning after 

September 30, 2004, with earlier implementation encouraged. Other information 

required by SFFAS 17 shall be presented as RSI, except to the extent that the 

preparer elects to include some or all of that information in notes that are presented 

as an integral part of the basic financial statements, for periods beginning after 

September 30, 2004. 

Amendment of SFFAS 26 

5. Par. 6 of SFFAS 26 is amended as follows: 

Consistent with the effective date of SFFAS 25, this This standard is effective 

for periods beginning after September 30, 2004 2005. 

Effective Date 

6. This standard is effective upon issuance. 

The provisions of this Statement need not be applied to immaterial items. 
Appendix A: Basis for Conclusions 3

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____________________________________________________________________________________ 

Federal Accounting Standards Advisory Board 

Deferral of the Effective Date of Reclassification of the Statement of Social Insurance: Amending SFFAS 

25 and 26 

January 6, 2005 

Appendix A: Basis for Conclusions 

This appendix discusses factors considered significant by Board members in reaching 

the conclusions in this standard. It includes the reasons for accepting certain 

approaches and rejecting others. Individual members gave greater weight to some 

factors than to others. The standards enunciated in this statement---not the material in 

this appendix---govern the accounting for specific transactions, events or conditions. 

7. The Board conferred with the AICPA regarding the need for audit guidance prior 

to issuing SFFAS 25. In late 2003, a task force of the AICPA was formed to 

develop audit guidance. An exposure draft of the guidance was issued by the 

AICPA in March 2004. The final guidance was not issued in sufficient time to 

prepare for the initial implementation date despite the extensive efforts of the 

AICPA. 

8. The Board issued an exposure draft proposing this deferral on July 21, 2004. 

Comments were received from the following sources: 

FEDERAL 

(Internal) 

NON-FEDERAL 

(External) 

Users, academics, others 2 

Auditors 2 1 

Preparers and financial 

managers 

5 

9. All ten respondents supported the proposed deferral. 

Structure of the Amendment 

10. SFFAS 25, par. 7 contained provisions concerning the SOSI as well as an 

effective date for the provisions. SFFAS 26 replaces the reclassification 

provisions of SFFAS 25 related to the SOSI and provides an effective date for 

the revised provisions. The amendments in this standard replace the prior 

effective dates concerning the SOSI reclassification and information in the prior 

statements with a new effective date of "periods beginning after September 30, 

2005.” Appendix B presents SFFAS 26 as amended by this standard. 

Reasons for the Deferral 

11. Agencies requesting the deferred implementation identified the following 

consequences of the delayed audit guidance: 

a. Agency staff was not able to prepare for the audit process due to the 

uncertainty absent final audit guidance on the process. 
Appendix A: Basis for Conclusions 4

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____________________________________________________________________________________ 

Federal Accounting Standards Advisory Board 

Deferral of the Effective Date of Reclassification of the Statement of Social Insurance: Amending SFFAS 

25 and 26 

January 6, 2005 

b. Agency staff was engaged in deliberations with the AICPA task force and 

unable to begin tentative preparations for the audit. 

c. Contracts for audit engagements have not been expanded to encompass 

the audit process to be required relative to the SOSI. 

d. Funding for the expanded audit engagements could not be included in 

fiscal year 2005 budget submissions. 

12. The Board believes that a one-year delay is reasonable, necessary and 

appropriate in light of the delayed audit guidance. 

Board Approval 

13. This statement was approved for issuance by all members of the Board.
Appendix B: SFFAS 26 5

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____________________________________________________________________________________ 

Federal Accounting Standards Advisory Board 

Deferral of the Effective Date of Reclassification of the Statement of Social Insurance: Amending SFFAS 

25 and 26 

January 6, 2005 

Appendix B: SFFAS 26 

Paragraphs 4 through 6 of SFFAS 26 are presented with the revisions 

included for ease of reference. 

Amendment of SFFAS 25 

4. Paragraph 6 of SFFAS 25 is rescinded. 

5. The information required by paragraphs 27(3) and 32(3) of SFFAS 17 shall be 

presented as a basic financial statement rather than as required supplementary 

stewardship information (RSSI). The underlying significant assumptions shall be 

included in notes that are presented as an integral part of the basic financial 

statement. Other information required by SFFAS 17– including the sensitivity 

analysis required in par. 27(4) and 32(4)-- shall be presented as required 

supplementary information, except to the extent that the preparer elects to 

include some or all of that information in notes that are presented as an integral 

part of the basic financial statements. 

Effective Date 

6. Consistent with the effective date of SFFAS 25, thisThis standard is effective for 

periods beginning after September 30, 2004 2005. 

The provisions of this Statement need not be applied to immaterial items. 
Appendix C: Abbreviations 6

____________________________________________________________ 

____________________________________________________________________________________ 

Federal Accounting Standards Advisory Board 

Deferral of the Effective Date of Reclassification of the Statement of Social Insurance: Amending SFFAS 

25 and 26 

January 6, 2005 

Appendix C: Abbreviations 

AICPA American Institute of Certified Public Accountants 

FASAB Federal Accounting Standards Advisory Board 

GAAP Generally Accepted Accounting Principles 

HHS Department of Health and Human Services 

RSI Required Supplementary Information 

RSSI Required Supplementary Stewardship Information 

SFFAC Statement of Federal Financial Accounting Concepts 

SFFAS Statement of Federal Financial Accounting Standards 

SSA Social Security Administration 

SOSI Statement of Social Insurance 
FASAB Board Members 

David Mosso, Chair 

Joseph V. Anania, Sr. 

Philip T. Calder (through July 31, 2004) 

Claire Gorham Cohen 

Robert Dacey (beginning August 1, 2004) 

John A. Farrell 

James M. Patton 

Robert N. Reid 

Elizabeth Robinson 

Alan H. Schumacher 

David Zavada 

FASAB Staff 

Wendy M. Comes, Executive Director 

Federal Accounting Standards Advisory Board 

441 G Street NW, Suite 6814 

Mail Stop 6K17V 

Washington, DC 20548 

Telephone 202-512-7350 

FAX 202-512-7366 

www.fasab.gov