Statement of Federal Financial Accounting Standards 36 

 

 September 28, 2009 

Reporting Comprehensive Long-Term Fiscal Projections for the 

U.S. Government 

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 

addition 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 Statements 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

This is a work of the U. S. government and is not subject to copyright protection in the United 

States. It may be reproduced and distributed in its entirety without further permission from FASAB. 

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Summary 3

____________________________________________________________________________________ 

Federal Accounting Standards Advisory Board 

Reporting Comprehensive Long-Term Fiscal Projections for the U.S. Government 

September 28, 2009

Summary 

This standard requires: 

1. A basic financial statement in the consolidated financial report of the U.S. 

Government (CFR) presenting for all the activities of the federal 

government: 

a. the present value of projected receipts and non-interest spending 

under current policy without change, 

b. the relationship of these amounts to projected Gross Domestic Product 

(GDP), and 

c. changes in the present value of projected receipts and non-interest 

spending from the prior year. 

2. Required Supplementary Information (RSI) that explains and illustrates 

a. the projected trends in: 

(1) the relationship between receipts and spending, 

(2) deficits or surpluses, 

(3) Treasury debt held by the public as a share of GDP, 

b. possible results using alternative scenarios, and 

c. the likely impact of delaying corrective action when a fiscal gap exists. 

3. Disclosures that explain and illustrate: 

a. the assumptions underlying the projections, 

b. factors influencing trends, and 

c. significant changes in the projections from period to period. 

These requirements will be implemented following a three-year transition period 

beginning in fiscal year (FY) 2010 during which all information may be presented as 

RSI. Beginning in FY 2013, the required information will be presented as a basic 

financial statement, disclosures and RSI as designated within the standards. 

The required information will help readers of the CFR assess “whether future 

budgetary resources will likely be sufficient to sustain public services and to meet 

obligations as they come due.”1

 Such an assessment is an important objective of 

federal financial reporting requiring prospective information about receipts and 

spending, the resulting debt, and how these amounts relate to the economy. 

 

1

 Statement of Federal Financial Accounting Concepts (SFFAC) 1, paragraphs 135 and 139. 
Table of Contents 4

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Federal Accounting Standards Advisory Board 

Reporting Comprehensive Long-Term Fiscal Projections for the U.S. Government 

September 28, 2009

Table of Contents 

Summary.......................................................................................................................3

Introduction ...................................................................................................................5

Purpose ................................................................................................................................................... 5

Materiality ................................................................................................................................................ 7

Effective Date .......................................................................................................................................... 7

Accounting Standards ...................................................................................................8

Scope....................................................................................................................................................... 8

Definitions................................................................................................................................................ 8

Policy, Economic, and Demographic Assumptions................................................................................. 9

Valuation Date ....................................................................................................................................... 12

Projection Periods ................................................................................................................................. 13

Basic Financial Statement..................................................................................................................... 13

Disclosures ............................................................................................................................................ 14

Required Supplementary Information.................................................................................................... 15

Supporting Data (Other Accompanying Information) ............................................................................ 17

Effective Date ........................................................................................................................................ 17

Appendix A: Basis for Conclusions .............................................................................18

Project History...................................................................................................................................... 18

Assumptions: Limitations of “Current Law” Assumptions ................................................................... 21

Fiscal Sustainability Task Force Input Regarding Policy Assumptions............................................... 22

Policy Assumptions.............................................................................................................................. 23

Economic and Demographic Assumptions.......................................................................................... 25

Basic Financial Statement ................................................................................................................... 25

Effective Date for Basic Information .................................................................................................... 26

Summary Measures............................................................................................................................. 27

Per Capita Measures ........................................................................................................................... 29

Time Horizon for Projections ............................................................................................................... 30

The Concepts of Fiscal Gap and Fiscal Imbalance............................................................................. 32

Foreign Holdings of U.S. Treasury Debt.............................................................................................. 34

Alternative Policy Proposals ................................................................................................................ 35

Inter-period or Inter-generational Equity.............................................................................................. 35

Other comments .................................................................................................................................. 36

Board Approval .................................................................................................................................... 37

Appendix B: Example Formats and Illustrations..........................................................38

Basic Financial Statement..................................................................................................................... 38

Examples of Selected Narrative and Graphics...................................................................................... 39

1. Rising Cost of Health Care .............................................................................................................. 39

2. Demographic Trends ....................................................................................................................... 42

3. Relationship of Projected Receipts and Spending .......................................................................... 44

4. Trends in Deficit Spending............................................................................................................... 45

5. Trends in Treasury Debt Held by the Public.................................................................................... 46

6. Impact of Delaying Action................................................................................................................ 47

7. Alternative Scenarios (Range Information)...................................................................................... 48

8. Fiscal Gap........................................................................................................................................ 48

9. Disclosure on Funding Mechanisms................................................................................................ 49

10. Other Required Information ........................................................................................................... 49

Appendix C: Frequently Asked Questions (FAQs) ......................................................50

Appendix D: Abbreviations..........................................................................................53

Appendix E: Fiscal Sustainability Reporting Task Force .............................................54

Appendix F: Glossary..................................................................................................55
Introduction 

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Federal Accounting Standards Advisory Board 

Reporting Comprehensive Long-Term Fiscal Projections for the U.S. Government 

September 28, 2009

5

Introduction 

Purpose 

1. In Statement of Federal Financial Accounting Concepts (SFFAC) 1, the 

Board established four objectives of federal financial reporting. These 

objectives provide a framework for assessing the existing 

accountability and financial reporting systems of the federal 

government and for considering new accounting standards.2 The 

objectives address (1) Budgetary Integrity, (2) Operating Performance, 

(3) Stewardship, and (4) Systems and Controls. 

2. Objective 3, Stewardship, is the primary focus for this Statement. 

Objective 3 states that: 

 Federal financial reporting should assist report users in 

assessing the impact on the country of the 

government's operations and investments for the period 

and how, as a result, the government's and the nation's 

financial condition has changed and may change in the 

future.3

 

3. Sub-objective 3B states that: 

Federal financial reporting should provide information 

that helps the reader to determine whether future 

budgetary resources will likely be sufficient to sustain 

public services4

 and to meet obligations as they come 

due.5

4. While federal financial reporting is not expected by itself to accomplish 

the stewardship reporting objective, it can contribute to meeting the 

objective.6

 This Statement’s contribution relates primarily to the federal 

government’s operations and financial condition; it does not extend to 

an assessment of the nation’s financial condition. 

 

2

 SFFAC 1, par. 109. 

3

 SFFAC 1, par. 134. 

4

 In this standard, “public services” refers to all goods, benefits and services provided by the government. 

Federal public services include but are not limited to the provision of goods, transfer payments (such as 

Social Security benefits) or other financial benefits (such as loan guarantees), as well as national 

defense, transportation safety and national parks. 

5

 SFFAC 1, par. 139. 

6

 SFFAC 1, par. 235.
Introduction 

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Federal Accounting Standards Advisory Board 

Reporting Comprehensive Long-Term Fiscal Projections for the U.S. Government 

September 28, 2009

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5. The Board believes that comprehensive long-term fiscal projections7

make an essential contribution to meeting the stewardship objective 

and especially sub-objective 3B because it is concerned with the future 

and the resources needed in the future. 

6. Long-term fiscal projections serve as the basis for key measures 

presented in the basic financial statement as well as narrative and 

illustrations required in the consolidated financial report of the U.S. 

Government (CFR). The more detailed objectives presented below 

were developed as one means of guiding the Board in developing the 

basic financial statement and in identifying the most important areas to 

be addressed through narrative, tables and/or graphics. 

Objectives of Basic Financial Statement (Comprehensive Long-Term Fiscal 

Projections for the U.S. Government) and Accompanying Disclosures and 

Required Supplementary Information 

7. In this Statement, “Fiscal Sustainability Reporting” is the short term 

for the basic financial statement, disclosures, and Required 

Supplementary Information (RSI) required in the CFR. Fiscal 

Sustainability Reporting should provide information to assist readers of 

the CFR in assessing whether future budgetary resources of the U.S. 

Government will likely be sufficient to sustain public services and to 

meet obligations as they come due,8

 assuming that current policy for 

federal government public services and taxation is continued without 

change (hereafter referred to as “current policy without change”).9

8. Such an assessment is important not only because of its financial 

implications but also because it has social and political implications. 

For example, users of financial reports should be provided with 

information that is helpful in assessing the likelihood that the 

government will continue to provide public services to constituent 

groups and to assess whether financial burdens without related 

benefits were passed on by current-year taxpayers to future-year 

taxpayers.10 Fiscal Sustainability Reporting should assist the reader in 

understanding these financial, social and political implications. 

 

7

 Terms defined in the Glossary are shown in bold-face the first time they appear. 8

 SFFAC 1, par. 139. 

9

 Note that fiscal sustainability reporting does not extend to supporting a detailed assessment of whether 

current policy without change regarding federal public services and taxation is optimal; rather, it 

addresses the fiscal outlook if current policy is continued without change. 

10 The latter notion is sometimes referred to as “interperiod equity.”
Introduction 

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Federal Accounting Standards Advisory Board 

Reporting Comprehensive Long-Term Fiscal Projections for the U.S. Government 

September 28, 2009

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9. Fiscal Sustainability Reporting should be understandable to the 

intended users of the CFR. The primary intended users of this report 

are citizens and citizen intermediaries (for example, the media, public 

interest and advocacy groups, and others). The CFR should be easily 

understandable to the “average citizen” who has a reasonable 

understanding of federal government activities and is willing to study 

the information with reasonable diligence. 

Materiality 

10. The provisions of this Statement need not be applied to immaterial 

items. The determination of whether an item is material depends on 

the degree to which omitting or misstating information about the item 

makes it probable that the judgment of a reasonable person relying on 

the information would have been changed or influenced by the 

omission or the misstatement. 

Effective Date 

11. This Statement provides for a phased-in implementation, but earlier 

implementation is encouraged. All information will be reported as RSI 

for the first three years of implementation (fiscal years 2010, 2011, and 

2012). Beginning in fiscal year 2013, the required information will be 

presented as a basic financial statement, disclosures, and RSI as 

designated within the standard. 
Accounting Standards 

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Federal Accounting Standards Advisory Board 

Reporting Comprehensive Long-Term Fiscal Projections for the U.S. Government 

September 28, 2009

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Accounting Standards 

Scope 

12. The reporting requirements in this Statement apply to the consolidated 

financial report of the U.S. Government (CFR). They do not apply to 

financial statements prepared at the component entity level. They also 

do not affect the reporting in the Budget of the U.S. Government or any 

other special purpose report. 

Definitions 

13. Fiscal Gap 

The fiscal gap is the change in non-interest spending and/or receipts 

that would be necessary to maintain public debt at or below a target 

percentage of gross domestic product (GDP).11 More specifically, 

the fiscal gap is the net present value of projected spending12 minus 

projected receipts, adjusted by the decrease (or increase) in public 

debt required to maintain public debt at or below the target 

percentage of GDP for the stated projection period. The fiscal gap 

may be expressed as: 

a. a summary amount in present value dollars, 

b. a share of the present value of the GDP for the projection period, 

and/or 

c. a share of the present value of projected receipts or projected 

non-interest spending. 

14. Policy Assumptions 

Policy assumptions address the factors under the direct control of 

the federal government concerning the taxes and other receipts to be 

received by the federal government and the public services to be 

provided by the federal government. Policy assumptions address 

projected spending rules for both mandatory and discretionary 

spending13 as well as the framework for assessing taxes and fees. 

 

11 GDP is the total market value of all final goods and services produced domestically during a given 

period of time. The components of GDP are: private sector consumption and investment, government 

consumption and investment, and net exports (exports-imports). 

12 Since interest is factored into the present value calculation, the fiscal gap as a share of spending is 

expressed as a share of spending excluding interest (“non-interest spending”). 13In the federal budget process, “discretionary spending” refers to outlays from budget authority that is 

controlled by annual appropriation acts. Annual appropriation acts are required to fund the continuing 

operation of all federal programs that are not “mandatory.” “Mandatory spending” includes entitlement 
Accounting Standards 

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Federal Accounting Standards Advisory Board 

Reporting Comprehensive Long-Term Fiscal Projections for the U.S. Government 

September 28, 2009

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15. Current Policy Without Change 

In this standard, “current policy without change” refers to the 

continuation of policies in place as of the valuation date (in other 

words, no policy change). 

16. Economic Assumptions 

Economic assumptions address the economic factors that are not 

under the direct legislative control of the federal government (for 

example, inflation and growth in GDP). 

17. Demographic Assumptions 

Demographic assumptions address projected population trends 

(for example, birth rates, mortality rates, and net immigration). 

18. Public Services 

In federal financial reporting, “public services” refers to all goods, 

benefits and services provided by the government. Federal public 

services include but are not limited to the provision of goods, cash 

(such as Social Security benefits) or other financial benefits (such as 

loan guarantees), or services such as national defense, 

transportation safety, and the operation of national parks. 

Policy, Economic, and Demographic Assumptions 

19. Fiscal Sustainability Reporting for the U.S. Government should provide 

information that helps the reader to determine whether current policy 

without change is likely to produce future budgetary resources 

sufficient to sustain public services and to meet obligations as they 

come due. Long-term projections should help the reader to 

understand the fiscal implications of continuing current policy without 

change regarding public services and taxation along with other factors 

such as projected economic and demographic trends. 

20. Projections of deficits, surpluses, and debt are a central feature of 

Fiscal Sustainability Reporting. Projections are not forecasts or 

predictions; they are designed to depict results that may occur under 

 

authority such as Social Security and Medicare and payment of interest on the national debt. Congress 

controls mandatory spending by controlling eligibility and setting benefit and payment rules, rather than by 

annual appropriation acts. For additional information, see A Glossary of Terms Used in the Federal 

Budget Process, GAO-05-734SP. Available at: http://gaoweb.gao.gov (accessed May 7, 2009) 
Accounting Standards 

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Federal Accounting Standards Advisory Board 

Reporting Comprehensive Long-Term Fiscal Projections for the U.S. Government 

September 28, 2009

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various conditions–for example, what if current policy without change 

regarding federal government public services and taxation are 

continued in the future? Projections are useful to display alternative 

future scenarios, but it is important to clearly explain the nature of the 

information being presented. 

21. Long-term projections are derived from models that rely heavily on 

assumptions. There is an expectation that such models will evolve over 

time. Therefore, this Statement provides guiding principles for selecting 

assumptions. The guiding principles address three types of 

assumptions: policy, economic, and demographic. 

22. Policy assumptions address the factors under the direct control of the 

federal government concerning the taxes and other receipts to be 

received by the federal government and the public services to be 

provided by the federal government. 

23. Economic assumptions address the economic factors that are not 

under the direct legislative control of the federal government (for 

example, inflation and growth in GDP). 

24. Demographic assumptions address projected population trends (for 

example, birth rates, mortality rates, and net immigration). 

25. When combined, policy, economic, and demographic assumptions 

determine the future projected receipts and spending. 

26. To illustrate the distinction between policy, economic and demographic 

assumptions: consider the application of policy, economic and 

demographic assumptions to the Social Security program. 

Assumptions relating to future Social Security eligibility and benefit 

formulas represent policy assumptions. Assumptions about 

productivity growth and inflation represent economic assumptions. 

Assumptions about the future population represent demographic 

assumptions. 

27. Policy assumptions should reflect reasonable assumptions about the 

future course of receipts and spending assuming the continuation of 

current policy without change. The guiding principle for selecting 

policy assumptions is to base selections on assumptions consistent 

with the continuation of policies in place as of the valuation date. 
Accounting Standards 

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Federal Accounting Standards Advisory Board 

Reporting Comprehensive Long-Term Fiscal Projections for the U.S. Government 

September 28, 2009

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28. Current law is the best place to start when identifying “current policy 

without change.” However, a simple projection of “current law” would 

not always reflect current policy without change. 

a. Cases where a departure from current law may be appropriate 

include but are not limited to those in which current law 

(1) expires almost immediately, 

(2) contains provisions that are internally inconsistent, or 

(3) has been changed in a consistent direction over time (i.e., there 

is a recurring history of change). 

b. The following examples demonstrate how a simple projection of 

current law may be inconsistent with the guiding principle: 

(1) Legislation providing for discretionary spending provides funding 

that extends at most a few years into the future. A current-law 

policy assumption would show discretionary spending falling to 

zero within a few years. In this situation a simple projection of 

“current law” would not reflect the implicit “current policy without 

change.” 

(2) Current law may contain inconsistent provisions in certain 

situations. For example, current law may contain provisions for 

scheduled social insurance benefit payments as well as 

provisions that restrict spending on certain social insurance 

programs, for example, Social Security and Part A of Medicare, 

to the amounts available in the Social Security or Medicare 

trust fund accounts, respectively, plus inflows of earmarked 

revenues. A current law policy assumption would not be 

feasible in this case since both requirements can not be met 

simultaneously. Thus, an interpretation of “current policy 

without change” will be necessary. 

(3) Current law may include provisions that have been changed in a 

consistent direction over a period of time. For example, the 

statutory limit on federal debt has been consistently raised. A 

current-law policy assumption would be that Treasury borrowing 

will never increase beyond the dollar amount of the current 

statutory limit. In such situations a simple projection of current 

law would not reflect the implicit “current policy without change.” 
Accounting Standards 

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Federal Accounting Standards Advisory Board 

Reporting Comprehensive Long-Term Fiscal Projections for the U.S. Government 

September 28, 2009

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29. Assumption of a uniform growth rate for all types of receipts and 

spending is not required. Assumptions may be based on, but are not 

limited to, the notion that non-interest spending or receipts are likely to: 

a. maintain a constant share of GDP, 

b. grow with inflation,14 or 

c. maintain a constant real15 per capita level.16

30. Judgment should be applied in selecting assumptions. Policy 

assumptions representing the worst case scenario are not required. 

The preparer’s objective should be to produce unbiased projections. 

31. The same economic and demographic assumptions generally should 

be used for the basic financial statement for Fiscal Sustainability 

Reporting and for Social Security and/or Medicare in the Statement of 

Social Insurance (SOSI) although exceptions may be necessary when 

considering all projected receipts and spending. For example, an 

appropriate unified discount rate for all projected receipts and spending 

in the basic financial statement may differ from either the Social 

Security or Medicare discount rate. (See paragraph 40.c.) 

32. The projection of current policy without change is intended to show the 

long-term results of current policy without change. The projection of 

current policy without change is not a forecast or prediction. This 

distinction must be clearly explained in the narrative accompanying the 

principal financial statement, the disclosures and the RSI. 

Valuation Date 

33. All projections and estimates required in this Statement should be 

made as of a date (the valuation date) as close to the end of the fiscal 

year being reported on (“current year”) as possible and no more than 

one year prior to the end of the current year. This valuation date 

should be consistently followed from year to year. 

 

14 Inflation is growth in a general measure of prices, usually expressed as an annual rate of change. 15 In economic terms, “real” means adjusted to remove the effects of inflation. 16 As applicable, the characteristics of the population should be considered for expenditures that benefit 

identifiable subgroups. 
Accounting Standards 

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Federal Accounting Standards Advisory Board 

Reporting Comprehensive Long-Term Fiscal Projections for the U.S. Government 

September 28, 2009

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34. If, after the valuation date, but prior to the end of the fiscal year, policy 

changes are enacted that could materially affect the basic statement, 

the projections should be adjusted, if feasible,17 as if the policy 

changes took place as of the valuation date. If not feasible, the entity 

should disclose an estimate of the magnitude of the effect of the policy 

change on the projection or, if not possible, disclose that it was not 

possible to reasonably estimate the effect. In any case, the nature of 

the policy change should be disclosed. If policy changes are enacted 

after the end of the fiscal year, but prior to the issuance of the financial 

statements, the financial statements should disclose the nature of the 

policy change and, if known, the estimated effect on the projections. 

Projection Periods 

35. Projections in the basic financial statement should be for a finite 

projection period sufficient to illustrate long-term sustainability. 

If the projection period in the basic financial statement is not 

consistent with the projection period used for Social Security and 

Medicare in the SOSI, the disclosures should display the subtotal 

and total line items of the basic financial statement calculated for the 

projection period that was used for Social Security and Medicare in 

the SOSI.18 

Basic Financial Statement 

36. The basic financial statement, Long-Term Fiscal Projections for the 

U.S. Government, should state the projection period and display the 

following projected amounts as both present value dollars and as a 

percentage of the present value of GDP for the projection period 

indicated: 

a. receipts, disaggregated by major programs such as Medicare, 

Social Security, and all other receipts, and total receipts;19

 

17 Factors affecting feasibility include but are not limited to the timing of the enactment of legislation and 

the ability of the preparers to revise the financial statements and/or the ability of the auditors to audit the 

revised information prior to the issuance of the financial statements and/or the audit opinion. 18 The SOSI projection period is required to be “sufficient to illustrate long-term sustainability (for example, 

traditionally the “Social Security” or OASDI, program has used a projection period of 75 years for longterm projections).” See SFFAS 17, paragraph 27. 

19 Full payment of amounts due to Social Security and Medicare HI Trust Funds must be included as 

receipts for Medicare and Social Security, and outlays for “rest of government.” 
Accounting Standards 

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Federal Accounting Standards Advisory Board 

Reporting Comprehensive Long-Term Fiscal Projections for the U.S. Government 

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b. non-interest spending, disaggregated by major programs such as 

Medicare, Medicaid, Social Security, and all other non-interest 

spending, total non-interest spending; and 

c. the difference between projected receipts and projected noninterest spending. 

 

37. After the initial year of implementation, the basic financial statement 

should also present comparative amounts for the current year and prior 

year, and the net change for each line item from the prior year as both 

present value dollars and as a percentage of the present value of GDP 

for the projection period indicated. 

38. Fiscal gap information should be provided, either on the face of the 

financial statement or in the disclosures. 

Disclosures 

39. Disclosures should include an explanation of the following limitations: 

a. Forward-looking projections require assumptions and estimates 

relating to future events, conditions, and trends; actual results may 

differ materially from those that are projected. 

b. Forward-looking projections focus on future cash flows, and do not 

reflect either the accrual or modified-cash basis of accounting. 

c. Projections are not forecasts or predictions; they are designed to 

answer the question “what if?” – for example, what would be the 

impact on federal borrowing if current policies without change were 

continued for a long period of time? 

d. Forward-looking projections may also encompass hypothetical 

future trends or events that are not necessarily deemed probable 

(for example, the assumed ability to continue issuing new public 

debt indefinitely). 

e. Fiscal Sustainability Reporting is limited to the activity of the federal 

government, and does not include activities of state and local 

governments or the activities of the private sector. 

f. The summary measures cover a finite period and consideration 

should be given to trends following the end of the projection period. 
Accounting Standards 

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Federal Accounting Standards Advisory Board 

Reporting Comprehensive Long-Term Fiscal Projections for the U.S. Government 

September 28, 2009

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Disclosures should refer the readers to the RSI for a further 

discussion of this limitation.20

40. Disclosures should also include: 

a. a “plain English” explanation of present value and interest rates 

used to calculate present value. 

b. significant policy assumptions used in making the projections. 

c. any significant differences in economic and demographic 

assumptions from those used for Social Security and/or Medicare in 

the preparation of the SOSI and a reference to the note presenting 

assumptions used in the SOSI. 

d. an explanation of the most significant departures from current law–

for example, allowing for exceeding the statutory limit on federal 

debt. 

e. the significant reasons for the changes when year-by-year 

comparisons are displayed. For example, significant changes may 

be attributable to the following broad causes: 

(1) valuation period (for example, the beginning of the projection 

period is one year later); 

(2) changes in policies (legislation); and 

(3) changes in assumptions or estimates. 

f. The net excess of non-interest spending over receipts 

disaggregated between (1) programs funded by the government’s 

general revenues (which would currently21 include Federal 

Supplementary Medical Insurance (Medicare Parts B and D), as 

well as other programs), and (2) major programs that are funded by 

payroll and self-employment taxes and that are not financed in any 

material respect by the government’s general revenues (which 

would currently consist of Social Security (Old Age, Survivors and 

Disability Insurance (OASDI)) and Medicare Part A), accompanied 

by a discussion of the different funding mechanisms for the two 

types of programs. 

Required Supplementary Information 

 

20 See paragraph 42. 21 “Currently” means as of the date of Board approval of this SFFAS in June 2009.
Accounting Standards 

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Federal Accounting Standards Advisory Board 

Reporting Comprehensive Long-Term Fiscal Projections for the U.S. Government 

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41. RSI should explain and illustrate: 

a. trends in: 

(1) historical and projected Treasury debt held by the public as a 

share of GDP, 

(2) historical and projected receipts and spending, and 

(3) historical and projected deficits and surpluses 

for a progression of years beginning at least 20 years before the 

current year and, at a minimum, extending to the end of the 

projection period used in the basic financial statement. These 

amounts should be presented at regular time intervals (for 

example, every five years or ten years). 

b. the major factors that are expected to have a significant impact 

upon projected receipts and spending, and how such factors are 

expected to change over time. For example, two such factors may 

be (1) the rising cost of health care and (2) demographic trends. 

Information about how such factors have changed and are 

expected to change over time is necessary to assist the reader in 

understanding the factors that influence fiscal projections. 

c. if an excess of projected non-interest spending over projected 

receipts is indicated by the projections, the likely impact of delaying 

action. For example, graphics could illustrate the progressive 

increase in the change that would be needed to close the fiscal gap 

by (1) reducing non-interest spending, or (2) increasing receipts. 

d. the results of alternative scenarios that are consistent with current 

policy without change. Alternative scenarios are projections in 

which one or more significant assumptions is varied from the 

assumptions used in the projections presented in the basic financial 

statement. The choice of alternative scenarios presented should 

consider both those that result in larger as well as those that result 

in smaller net differences between the present value of projected 

receipts and non-interest spending. Projections for alternative 

scenarios may be displayed in a table format. The major causes of 

the differences between the results of the alternative scenarios and 

the basic financial statement should be explained. 

42. RSI should also include an explanation of the significance of the data 

presented or other information that puts the data into context. Options 

for context may include but are not limited to: 

a. comparison of the data/trend with past U.S. trends and trends in 

other developed nations, 
Accounting Standards 

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Federal Accounting Standards Advisory Board 

Reporting Comprehensive Long-Term Fiscal Projections for the U.S. Government 

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b. where to find information about outside organizations that use 

similar data to assess the long-term implications for an entity or 

sovereign government, for example, the role of rating organizations 

and/or European Union rules for member nations, and/or 

c. information that may be helpful to readers in assessing whether 

financial burdens without related benefits were passed on by 

current-year taxpayers to future-year taxpayers. 

43. RSI should discuss the implications of the trends in receipts and 

spending for periods following the end of the projection period. This 

requirement may be met by providing projections for an infinite horizon 

or a narrative discussion. 

Supporting Data (Other Accompanying Information) 

44. The quantitative data supporting the basic financial statement, 

disclosures and RSI may be provided in or referenced as other 

accompanying information.22

Effective Date 

45. The following phase-in of reporting requirements as basic information 

provides for full implementation for reporting periods beginning after 

September 30, 2012. 

a. These standards are effective for periods beginning after 

September 30, 2009. 

b. Information should be reported as RSI for the first three years of 

implementation (fiscal years 2010, 2011, and 2012). 

c. Beginning in fiscal year 2013, the required information should be 

presented as specified in paragraphs 12 - 42. 

d. Earlier implementation is encouraged. 

The provisions of this Statement need not be applied to immaterial items.

 

22 For example, a link to a more detailed report such as the President’s Budget, a Congressional Budget 

Office report, or the Trustees Report (Status of the Social Security and Medicare Program) may be 

provided. Note that the Trustees Report is available at: http://www.ssa.gov/OACT/TR/ (accessed May 7, 

2009). 
Appendix A: Basis for Conclusions 18

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Federal Accounting Standards Advisory Board 

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Appendix A: Basis for Conclusions 

This appendix discusses some factors considered significant by Board members in 

reaching the conclusions in this Statement. 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–should govern the accounting for specific transactions, 

events, or conditions. 

Project History 

A1. This project was initiated to address the Board’s Reporting Objective 3, 

in particular sub-objective 3b, below: 

Objective 3: Stewardship 

Federal financial reporting should assist report users in assessing 

the impact on the country of the government’s operations and 

investments for the period and how, as a result, the government’s 

and the nation’s financial condition has changed and may change 

in the future. Federal financial reporting should provide information 

that helps the reader to determine whether 

a. the government’s financial position improved or deteriorated over 

the period, 

b. future budgetary resources will likely be sufficient to sustain public 

services and to meet obligations as they come due, and 

c. government operations have contributed to the nation’s current and 

future well-being.23 

A2. The FASAB considered what information would most likely help 

readers of the consolidated financial report of the U.S. Government 

(CFR) assess whether future budgetary resources will likely be 

sufficient to sustain public services and meet obligations as they come 

due. 

A3. Discussion of such long-term fiscal issues has been described in terms 

such as “fiscal sustainability.” In the exposure draft (ED), the Board’s 

working definition of “fiscal sustainability” was the federal government’s 

ability to continue, both now and in the future, current policy without 

 

23Statement of Federal Financial Accounting Concepts (SFFAC) 1, pars. 134-145, available at 

http://www.fasab.gov/codifica.html (accessed May 7, 2009).
Appendix A: Basis for Conclusions 19

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change regarding public services and taxation without causing debt to 

rise continuously as a share of GDP.24

A4. Throughout this project, the Board considered expert comments from a 

Fiscal Sustainability Reporting Task Force (“task force”) whose 

participants have technical knowledge relevant to the issues and/or 

communication expertise relevant to the challenge of how to effectively 

communicate complex information on long-term fiscal issues. 

A5. The task force participants included representatives from the American 

Enterprise Institute, the Cato Institute, the Brookings Institution, and 

the Urban Institute; the Chief Actuaries for Social Security and 

Medicare; technical experts from the Treasury Department, the Office 

of Management and Budget (OMB), the Government Accountability 

Office (GAO), and the Congressional Budget Office (CBO); members 

of Congress; and academics in the areas of public policy and 

communication. 

A6. FASAB staff also researched existing reporting on comprehensive 

government-wide long-term projections published in English by other 

countries (for example, the United Kingdom, Australia, New Zealand, 

and Canada) and studies by the European Commission, and conferred 

with staff of the International Public Sector Accounting Standards 

Board (IPSASB). 

A7. The ED, Reporting Comprehensive Long-Term Fiscal Projections for 

the U.S. Government, was issued on September 5, 2008 with 

comments requested by January 5, 2009. The ED proposed standards 

for reporting comprehensive long-term fiscal projections for the U.S. 

Government via a basic financial statement and disclosures. The ED 

proposed that the reporting requirements would be subject to a phased 

implementation as Required Supplementary Information (RSI) for fiscal 

years 2010, 2011 and 2012, and as a basic financial statement and 

related disclosures beginning in fiscal year 2013. Based upon public 

comments and Board deliberations, the final Statement provides for all 

information to be reported as RSI for the first three years (FY 2010, 

2011, and 2012). Beginning in fiscal year 2013, the required 

information will be presented as a basic financial statement, 

 

24 Determining how much a government can depart–in magnitude and/or duration–from this general 

notion of fiscal sustainability is beyond the scope of the Board’s efforts.
Appendix A: Basis for Conclusions 20

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disclosures and RSI as designated within the accounting standards 

(paragraphs 12 - 42).25

A8. Upon release of the ED, notices and press releases were provided to: 

a. the Federal Register; 

b. FASAB News;

c. the Journal of Accountancy, AGA Today, the CPA Journal, 

Government Executive, the CPA Letter, and Government 

Accounting and Auditing Update; 

d. the CFO Council, the Presidents Council on Integrity and Efficiency, 

Financial Statement Audit Network, and the Federal Financial 

Managers Council; and 

e. committees of professional associations generally commenting on 

exposure drafts in the past. 

A9. This broad announcement was followed by direct mailings of the ED to 

majority and minority staff directors of relevant congressional 

committees, over 300 think tanks and public interest groups, and past 

respondents on similar issues, such as the FASAB’s Preliminary 

Views: Accounting for Social Insurance (issued in October 2006). 

 

A10. There were 22 responses from the following sources: 

 FEDERAL 

(Internal) 

NON-FEDERAL 

(External) 

Users, academics, others 14 

Auditors 3 

Preparers and financial managers 5 

A11. The Board did not rely on the number in favor of or opposed to a given 

position. Information about the respondents’ majority view is provided 

only as a means of summarizing the comments. The Board 

considered the arguments in each response and weighed the merits of 

the points raised. The respondents’ comments are summarized for 

each major issue addressed below. 

A12. In addition, a public hearing was held on February 25, 2009. The 

public hearing addressed two EDs: this ED and another ED, 

 

25 See paragraph A38 for a discussion of the effective date for basic information. 
Appendix A: Basis for Conclusions 21

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Accounting for Social Insurance, Revised. Seven speakers addressed 

this ED: 

 FEDERAL 

(Internal) 

NON-FEDERAL 

(External) 

Users, academics, others 5 

Auditors 1 

Preparers and financial managers 1 

Assumptions: Limitations of “Current Law” Assumptions 

A13. Projections are the central feature of Fiscal Sustainability Reporting 

and require that assumptions be made. The Board believes that the 

most useful projections will reflect current policy without change 

regarding federal public services and taxation. 

A14. Although current law is a reasonable starting point in selecting policy 

assumptions, a simple projection of “current law” would not always 

reflect current policy without change regarding public services or 

taxation. The Board’s proposal includes a guiding principle for 

selecting policy assumptions but acknowledges the role of judgment in 

filling voids in current law (for example, when current law expires 

almost immediately) or departing from current law provisions. 

A15. Major provisions of current law often do not extend far enough into the 

future to be used as a basis for a long-range projection. Discretionary 

spending is primarily based upon annual appropriation acts, and even 

some mandatory spending programs are subject to authorizing 

legislation that expires in the near future. For example, the legislation 

authorizing several mandatory programs (such as Food Stamps, 

student assistance for higher education, and agricultural price 

supports) expires and legislative action would be required for the 

programs to continue past the expiration date. 

A16. Current law may contain provisions for scheduled social insurance 

benefit payments as well as provisions that restrict spending on certain 

social insurance programs, for example, Social Security and Part A of 

Medicare, to the amounts available in the Social Security or Medicare 

trust fund accounts, respectively, plus inflows of earmarked receipts. A 

current law policy assumption would not be feasible in this case since 

both requirements can not be met simultaneously. Thus, an 

interpretation of “current policy without change” will be necessary. . 
Appendix A: Basis for Conclusions 22

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A17. Current law also may include tax provisions that expire within several 

years, along with a historical trend of extending those tax provisions 

before they expire—but only for a short period, such as one year. In 

such situations, current law would indicate that the tax provisions will 

expire on schedule, while a projection based upon current policy 

without change for taxation together with reasonable expectations 

based on recent historical trends may indicate that the tax provisions 

will be extended. 

Fiscal Sustainability Task Force Input Regarding Policy Assumptions 

A18. A majority of the task force technical experts agreed that policy 

assumptions for the basic financial statement that are consistent with 

current policy without change26 regarding federal public services and 

taxation would be useful for readers of the CFR in assessing whether 

future budgetary resources will likely be sufficient to sustain public 

services and to meet obligations as they come due. 

A19. A majority of the task force technical experts believe that for mandatory 

spending on social insurance programs, a modified version of current 

law (ignoring the exhaustion of the Social Security and Medicare 

Hospital Insurance trust fund accounts — see paragraph A16), which 

might also be termed “current services,” represents the most useful 

assumption for projecting spending for social insurance programs. 

However, a minority believe that any deviation from current law 

requires a subjective judgment that can be biased. 

A20. The technical experts also acknowledged that projections for 

discretionary spending are more uncertain than projections for 

mandatory spending, since current law often only addresses the next 

one or two years. However, there was some agreement among the 

group that projecting discretionary spending growth at the same rate 

as assumed GDP per capita would be an example of a reasonable 

option for some programs. 

 

26 “Current policy without change” as defined in this Statement is not equivalent to constant dollar 

amounts. Current policy without change is to be considered with respect to the service or benefit being 

provided (or scheduled to be provided) and the general relationship of taxation to the economy (for 

example, taxable income, GDP, or some other base).
Appendix A: Basis for Conclusions 23

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A21. A report issued by the GAO27 illustrates the tension between choosing 

current law versus current policy without change regarding federal 

public services and taxes. The report’s primary display contains two 

different projections in a single graphic presentation: the 10-year CBO 

baseline, which is then projected into the future (called “baseline 

extended”) and a different projection (called an “alternative 

simulation”), which includes modifications that are described in the 

narrative. The “baseline extended” projection is based on assumptions 

that focus on current law. Those assumptions are changed in the 

GAO’s “alternative simulation” to reflect historical trends and recent 

policy preferences. 

A22. The GAO’s approach of showing two different sets of numbers 

provides a more complete picture than selecting one or the other. 

However, this approach does not achieve one of the most important 

characteristics of effective communication. All of the communication 

experts and many of the technical experts on the task force strongly 

emphasized the importance of simplicity of presentation. The Board 

noted that one of the greatest challenges inherent in Fiscal 

Sustainability Reporting is the tension between technical rigor and 

simplicity of presentation. 

Policy Assumptions 

A23. The Board believes that the most useful reporting on fiscal 

sustainability would illustrate the long-term effects of current policy 

without change regarding public services and taxation. However, there 

are numerous ways of projecting current policy into the future. For 

example, it could be assumed that discretionary spending will continue 

as a constant share of GDP. Another alternative would be to assume 

constant real spending per capita (which could give a different result 

from assuming growth at a constant share of GDP). Yet another 

alternative would be to assume constant growth at the rate of inflation, 

which may be different than the growth of GDP.28 (Historically, 

nondefense discretionary spending has grown roughly with GDP while 

defense discretionary spending has grown slightly faster than inflation 

but less than GDP, often in a nonlinear pattern.) 

 

27 The Nation’s Long-Term Fiscal Outlook, August 2007 Update (GAO-07-1261R). 28 For example, the CBO projects that the rate of inflation will be lower than the rate of GDP growth for 

2007-2017. See page xi, The Budget and Economic Outlook: Fiscal Years 2008 to 2017 (January 2007). 

Available at: http://www.cbo.gov (accessed May 7, 2009). 
Appendix A: Basis for Conclusions 24

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A24. The Board believes that the details of the assumptions for projecting 

current policy without change should be left to the judgment of the 

preparer, subject to review by the auditor. Regardless of which 

assumptions are used for the basic financial statement, the disclosures 

should include an explanation of the assumptions used and alternative 

scenarios, as well as the reasons for and the effect of changes in 

assumptions that result in significant changes from amounts reported 

in the prior period financial statement. Readers will have access to 

important explanatory material. 

A25. Current law may contain inconsistent provisions in certain situations 

(for example, regarding the impact on benefit payments upon the 

exhaustion of the balances in the Medicare Hospital Insurance trust 

fund account). As noted previously, although current law limits 

spending to the amounts available in the trust fund account and current 

earmarked revenue, current law provides for benefits that would 

exceed such a limit. Thus, current law contains inconsistent provisions 

and does not provide an answer. 

A26. When current law contains inconsistent provisions, the Board believes 

that in selecting assumptions, the projections should reflect current 

policy regarding federal government public services and taxation, and 

should answer the question “what if current policy without change were 

continued over time?” The resulting projection should be accompanied 

by a narrative that explains what would happen if an alternative event 

occurs (in the example in paragraph A25, the narrative could explain 

what percentage of Medicare reimbursements could not be paid if 

legislation does not provide for maintaining current reimbursement 

rates). 

A27. In drafting the final Statement, the Board also improved the clarity of 

the requirements for policy assumptions by re-ordering the content of 

this section. The guiding principles for when a departure from current 

law may be appropriate are stated first, followed by specific examples. 
Appendix A: Basis for Conclusions 25

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Economic and Demographic Assumptions 

A28. Economic and demographic assumptions are different in scope from 

policy assumptions. Economic and demographic assumptions include 

such factors as economic growth, inflation, birth rates, net immigration, 

and longevity. The elements of economic and demographic 

assumptions are generally influenced more by a variety of external 

factors than by direct legislative impact. 

A29. The ED proposed that the reporting requirements for Fiscal 

Sustainability Reporting should not dictate specific economic and 

demographic assumptions, but should require that the primary displays 

for Fiscal Sustainability Reporting should use economic and 

demographic assumptions that are consistent with the economic and 

demographic assumptions for Social Security and Medicare in the 

SOSI. 

A30. Although a majority of respondents concurred with the ED’s proposed 

broad and general guidance on economic and demographic 

assumptions, the GAO noted that in some cases, the assumptions, 

particularly the economic assumptions, may need to differ. For 

example, an appropriate unified discount rate for all projected receipts 

and non-interest spending in the basic financial statement may differ 

from either the Social Security or Medicare discount rates. Increasing 

the flexibility in the requirement would allow the use of the most 

appropriate discount rate and permit changes to other assumptions as 

appropriate. The GAO noted that such differences in assumptions 

used in the basic financial statement and those in the SOSI for Social 

Security and Medicare should be appropriately disclosed. 

A31. The Board decided to allow the flexibility recommended by the GAO 

and to require disclosure for significant differences. (See 

paragraphs 31 and 40.c.) 

Basic Financial Statement 

 

A32. The basic financial statement will report amounts in (a) present value 

dollars and (b) as a percentage of the present value of GDP for the 

projection period. The basic financial statement will be presented as 

RSI for a period of three years and will then become a basic financial 

statement. 
Appendix A: Basis for Conclusions 26

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Federal Accounting Standards Advisory Board 

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A33. Elements considered for inclusion as mandatory requirements for the 

basic financial statement were: 

a. total projected non-interest spending and receipts, disaggregated 

by major programs such as Medicare and Social Security 

b. the net total of all projected receipts and non-interest spending 

c. amounts displayed as both (present value) dollars and percent of 

GDP 

d. year-to-year (for example, side-by-side) comparison with prior year 

e. net change from year-to-year as a separate column 

f. alternative scenario information 

A34. A majority of the members decided that (a) through (e) above should 

be included as minimum requirements for the basic financial 

statement, with the format of the elements left to the discretion of the 

preparer. An illustrative statement is included in Appendix B. In 

addition, the Board concluded that the concept of fiscal gap should be 

explained and reported, either on the face of the financial statement or 

in the disclosures. An illustrative example is shown in Appendix B on 

the face of the illustrative basic financial statement. 

A35. The Board concluded that disaggregation of specific major programs 

would be left to the discretion of the preparer. 

A36. A majority of respondents agreed with the general guidance proposed 

in the ED: that major programs should be shown separately. However, 

respondents’ suggestions that named specific examples of major 

programs indicated that many respondents interpreted the illustrative 

financial statement in Appendix B as authoritative and inferred that 

social insurance programs are the federal government’s only “major 

programs.” 

A37. The Board decided to edit the illustrative basic financial statement in 

Appendix B by adding two additional lines, “Major Program A” and 

“Major Program B” to clarify the fact that social insurance programs are 

not the only major programs of the federal government. 

Effective Date for Basic Information 

A38. The ED proposed that the financial statement and disclosures be 

designated as basic information rather than continue as RSI beginning 

in fiscal year 2013. For three years prior to fiscal year 2013, the 

information in the basic financial statement and disclosures would be 
Appendix A: Basis for Conclusions 27

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presented as RSI. A majority of respondents addressing this issue, 

including the GAO, which will have the responsibility of auditing the 

basic information, agreed that the proposed implementation schedule 

is reasonable and appropriate. The GAO did identify several 

requirements that should remain RSI permanently, and the Board 

incorporated that recommendation into the requirements of the final 

Statement. 

A39. Given the potential for flexibility (within and between years) of policy 

assumptions underlying the projections, one member believes that 

significant disagreements between preparer and auditor are likely 

when the information becomes basic in fiscal year 2013. For example, 

paragraph 28.b(3) provides an example of a situation where departure 

from current law may be appropriate if historically consistent changes 

have been made. That member notes that it remains to be seen how 

historically consistent the changes must be to qualify and how 

departures from previously consistent patterns in policy will be 

addressed. In addition, based on its “but not limited to” language, 

paragraph 28 allows for an open-ended set of exceptions which have 

yet to be specified and defended. He believes, therefore, that the 

projection information should remain RSI until such time as preparation 

and audit procedures concerning exceptions to the “current law” 

approach to “current policy without change” can be developed and 

agreed upon. 

A40. The majority Board member view is that the preparer and auditor will 

resolve such disagreements by reference to the guiding principle – 

current policy without change. The Board is aware that significant 

judgment will be required. If any irreconcilable issues arise during the 

three-year transition period, the Board would be called upon to (1) offer 

implementation guidance or (2) defer the transition from RSI to basic 

information. 

Summary Measures 

A41. The Fiscal Sustainability Task Force technical experts did not agree on 

the usefulness of summary measures such as the present value 

amounts intended to be presented on the basic financial statement. 

Although some of the technical experts believe that summary 

measures convey important information, others believe that due to the 

inherent weakness of summary measures, they should be deemphasized. 
Appendix A: Basis for Conclusions 28

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A42. The inherent weaknesses of summary measures that were identified 

by the Fiscal Sustainability Task Force and considered by the Board 

include but are not limited to the following: 

a. A specific time horizon must be used in order to calculate any 

summary measure. There are no potential time horizons that do 

not have inherent weaknesses. Those weaknesses are discussed 

in paragraphs A50 - A57 below. 

b. Summary measures for long-term fiscal projections for the U.S. 

government are likely to produce very large numbers that readers 

find difficult to relate to. One potential remedy for this would be to 

report the numbers on a per capita basis, but that approach has 

weaknesses. Those weaknesses are discussed in 

paragraphs A46- A49 below. 

c. Potential “bottom-line” summary measures include fiscal imbalance 

and fiscal gap, both of which have inherent weaknesses. Those 

weaknesses are discussed in paragraphs A58 - A61 below. 

A43. In spite of the inherent weaknesses of summary measures, many of 

the technical experts and all of the communication experts 

recommended that summary measures, including a “bottom line” 

summary measure, are important and should be required. Among 

other reasons, summary measures are valuable for evaluating 

proposals and also for comparison of the prior reporting year to the 

current reporting year. For example, one technical expert said that 

highlighting changes resulting from such actions as the passage of 

new entitlement programs should be the “acid test” for any proposed 

reporting on fiscal sustainability. Such reporting (on whether a 

projected shortfall increased or decreased during the reporting period) 

can best be accomplished through the use of summary measures. 

Furthermore, a study by the Organisation for Economic Co-Operation 

and Development (OECD) found that 10 of 12 nations producing fiscal 

sustainability analyses included summary measures.29

A44. In order to address the difficulty that some readers may have with 

summary amounts that are expressed as very large present-value 

dollar amounts, the Board decided that each line item in the basic 

financial statement that is displayed in present-value dollar amounts 

 

29 OECD draft report, Fiscal Futures, Institutional Budget Reforms, and Their Effects: What Can Be 

Learned?, to be published in OECD Journal on Budgeting in 2009. 
Appendix A: Basis for Conclusions 29

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should also be displayed as a percentage of the present value of GDP 

for the projection period. 

A45. A majority of respondents agreed that the Board’s proposed basic 

financial statement, which requires summary measures, would be 

understandable and meaningful to readers. However, some 

respondents expressed the view that trend information is more 

understandable than summary measures. The Board decided to retain 

the basic financial statement as proposed in the exposure draft.30

While users’ preferences among individual items in the fiscal 

sustainability reporting package will vary, the Board believes that each 

requirement in the Statement is meaningful and necessary. 

Per Capita Measures 

A46. The Board considered whether to include per capita measures in the 

summary display. The technical experts serving on the Fiscal 

Sustainability Task Force did not come to agreement regarding the 

display of summary numbers on a per capita, per worker, and/or per 

household basis. 

A47. A majority of the technical experts on the task force recommended 

against per capita measures, for the following reasons: 

a. Several technical experts strongly objected to the use of per capita 

summary numbers using current-year population for the 

denominator. They said that such measures would imply that the 

current-year population is solely responsible for funding program 

shortfalls into the distant future. They believe that any changes 

needed to address the shortfalls projected through, for example, 

the next 75 years, should be spread across the population 

throughout that 75-year period. 

b. Other technical experts noted that per capita measures may be 

useful in conveying the magnitude of projected fiscal imbalances 

and could be displayed if summary amounts are divided by the 

population that parallels the horizon indicated and a narrative is 

included that explains present value and the nature of the 

numerator and denominator. 

c. Per capita measures for infinite-horizon projection periods present 

special problems. It is uncertain how a reasonable per capita 

 

30 See additional discussion of the basic financial statement in paragraphs A32 through A37. 
Appendix A: Basis for Conclusions 30

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denominator for an infinite horizon ratio would be selected and 

explained, especially if the denominator includes an estimate of all 

individuals that enter the population during the projection period. 

d. Two technical experts believe that even present value per capita 

amounts can be misinterpreted, because the reader will compare 

the amount with current salary levels and not understand the role of 

potential future productivity increases. 

e. One technical expert objects to per capita amounts because they 

represent amounts distributed equally among individuals with 

widely different abilities to pay. 

A48. After a discussion of the above issues, the Board decided not to 

include per capita measures in the proposed reporting requirements. 

Several of the respondents to the ED indicated strong support for per 

capita amounts. Three respondents recommended per capita amounts 

on the face of the financial statement. One respondent specifically 

recommended a detailed per capita format titled “U.S. Taxpayer 

Personal Credit Card Statement.” 

A49. The Board decided that the technical arguments described in 

paragraph A47 were compelling and that the standard should not 

require per capita information. 

Time Horizon for Projections 

A50. There was strong disagreement among the task force participants 

regarding the selection of a time horizon for projections, in particular a 

finite horizon (for example, 75-year) versus an infinite horizon. One 

task force participant believes that only infinite-horizon projections 

should be displayed but others believe that infinite-horizon projections 

should not be shown. Some participants suggested that information 

using both finite and infinite-horizon projections be included. 

A51. A majority of the communication experts believe that information for 

both finite and infinite-horizon projections should be provided to 

readers, but not necessarily both within a primary display. 

A52. Arguments in favor of a finite horizon: 

a. A finite period would be sufficient to cover essentially all of the 

working and retirement years for current participants. 

b. A finite period is subject to less uncertainty than an infinite horizon. 
Appendix A: Basis for Conclusions 31

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c. A finite period is meaningful to readers. For example, readers can 

relate to a time period that will include the retirement of the 

youngest members of the current workforce. An infinite horizon is 

less meaningful to readers. Readers are less likely to relate to or 

be concerned about the U.S. Government’s fiscal condition in 200, 

500, or 1,000 years in the future. 

d. Infinite-horizon projections are no more informative to policymakers 

than 75-year projections, in part because projections beyond the 

75-year horizon are subject to significant uncertainty. A more 

detailed version of this argument is made in an article in the 

National Tax Journal: 

...many people already believe that the 75–year horizon is too distant to 

be meaningful, and that detailed projections over longer horizons 

suggest a false precision. A simpler projection assumption is that after 

75 years (or some other interval, T), the system will have settled into a 

steady state in which rates of growth of costs and tax revenues are 

thereafter constant, although not necessarily equal.31

A53. Arguments in favor of an infinite horizon: 

a. Unless trends are level towards the end of the period, projections 

may be subject to the “moving window” effect, where shortfalls (or 

surpluses) increase significantly from one reporting year to the next 

due to the change in the projection period. For example, if a 

projection period is 75 years, the activity in “year 76” is outside the 

projection period for that year, but will be included in the projection 

period for the following year. An infinite horizon would avoid the 

“moving window” effect that occurs when there are significant 

changes to an estimate from one year to the next that are caused 

by the passage of time. 

b. Some have argued that a finite projection period essentially 

assumes zero for years beyond the projection period. Infinitehorizon projections would not assume zero for years beyond the 

cutoff point for projections. 

A54. The Board believed that the advantages of both finite and infinite 

horizons were sufficiently compelling to propose in the ED that both 

finite and infinite-horizon information should be provided, although only 

one projection period should be used for the basic financial statement. 

The ED proposed that whichever type of projection period is selected 

 

31 Sustainable Social Security- What Would It Cost? National Tax Journal, Vol. LVI, No. 1, Part 1, March 

2003, page 34. Available at http://ntj.tax.org 

/wwtax/ntjrec.nsf/5DC000487120304885256D8E0054C858/$FILE/Lee.pdf (accessed May 7, 2009). 
Appendix A: Basis for Conclusions 32

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for the primary display, the other type of projection period would have 

been presented with the disclosures. 

A55. The Board also believed that one of the projection periods used (in 

either the basic financial statement or the narrative section) should be 

consistent with that used for the SOSI. This would ensure consistency 

between major line items in the SOSI (for example, projected 

earmarked receipts and spending for Social Security and Medicare) 

and corresponding line items in the basic financial statement or the 

disclosures. 

A56. A majority of respondents disagreed with the Board’s proposal to 

require reporting projected data for both finite and infinite time 

horizons. Respondents said that requiring projected data for an infinite 

time horizon would be: too much information, irrelevant, and 

unacceptably uncertain due to many major events that are very difficult 

or impossible to predict, such as depressions, natural disasters, and 

wars. A majority of respondents disagreed with the Board’s proposal 

not to specify a time horizon for projected data. Several respondents 

recommended a specific time horizon of 75 years. 

A57. The Board decided not to require reporting on the infinite horizon and 

to explicitly require a finite horizon for the basic financial statement. 

The Board addressed the issue of trends beyond the end of the 

projection horizon by adding a requirement that the RSI should discuss 

the implications of the sustainability information, particularly the 

information in the basic financial statement, after the end of the 

projection period. This requirement may be met by providing 

projections for an infinite horizon. (See paragraph 42.) 

The Concepts of Fiscal Gap and Fiscal Imbalance 

A58. The Board considered two potential summary measures for 

presentation below the other required elements on the basic financial 

statement or separate disclosure: fiscal gap and fiscal imbalance. 

a. The fiscal gap is the change in non-interest spending or receipts 

that would be necessary to maintain public debt at or below a target 

percentage of GDP. 
Appendix A: Basis for Conclusions 33

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Federal Accounting Standards Advisory Board 

Reporting Comprehensive Long-Term Fiscal Projections for the U.S. Government 

September 28, 2009

b. The fiscal imbalance is the net present value of existing federal 

debt plus projected non-interest spending,32 minus projected 

receipts. In other words, it is the fiscal gap when the target level of 

federal debt at the end of the projection period is zero. The fiscal 

imbalance illustrates the amount that would be necessary to 

balance projected receipts, projected non-interest spending, and 

repayment of debt for a stated projection period. 

A59. Several of the Task Force technical experts indicated that the fiscal 

imbalance, as defined above, overstates the size of the problem over 

any finite time period such as 75 years. The fiscal imbalance is 

defined as the existing federal debt plus projected non-interest 

spending less projected receipts. If projected receipts are large 

enough to set the fiscal imbalance to zero after 75 years (or any other 

fixed time period), this would imply the debt was paid off at the end of 

the period. Many of the technical experts argued that this is not 

necessary for continued solvency provided the economy is expected to 

last longer than 75 years. A positive level of debt is viewed by many to 

be fiscally acceptable at the end of the projection period, provided it is 

not too large or growing too fast. 

A60. The fiscal gap measure does not require a target debt level of zero; 

instead, it allows for a positive level of debt at the end of the forecast 

horizon. In order to report the fiscal gap as a single amount (in present 

value dollars or as a percentage of GDP, projected receipts or 

projected non-interest spending), a target debt level relative to GDP 

must be selected. Such a measure would show the magnitude of 

increases in receipts or cuts in non-interest spending that would be 

needed to achieve that target. However, any specific limit selected 

may be considered arbitrary. In the United States, there is currently no 

legislated goal for debt as a share of GDP or a legislated limit on 

borrowing other than the statutory debt limit, which has been frequently 

raised. 

A61. Since the Board has no objective basis for selecting a debt-to-GDP 

limit or goal, the requirements for information about the fiscal gap do 

not include a specific debt-to-GDP limit or goal. Fiscal gap should be 

explained and reported, either on the face of the financial statement or 

in the disclosures. 

 

32 Since interest is factored into the present value calculation, the fiscal gap as a share of spending is 

expressed as a share of spending excluding interest. 
Appendix A: Basis for Conclusions 34

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Federal Accounting Standards Advisory Board 

Reporting Comprehensive Long-Term Fiscal Projections for the U.S. Government 

September 28, 2009

Foreign Holdings of U.S. Treasury Debt 

A62. A significant minority of members supported a proposal that the 

proportion of U.S. Treasury debt held by foreign investors is also 

important information and should be reported as RSI. They point out 

that while it is important to report the large and growing gap between 

receipts and spending, the extent to which deficits are being financed 

by foreign lenders is also significant information, particularly in light of 

the large and growing increase in that proportion. 

A63. The members supporting this additional requirement pointed out that 

foreign lenders cannot be counted on to be always willing to finance 

the government’s deficits; that the magnitude of this indebtedness to 

foreign lenders has national security implications, including threatening 

our international standing and influence and limiting our foreign policy 

options; and it results in the interest payments on the debt going 

abroad instead of providing income to U. S. residents and feeding into 

our economy. 

A64. The members supporting this additional requirement therefore 

proposed that RSI should include an illustration and/or explanation of 

the trend in foreign holdings of U.S. Treasury debt for a minimum of 15 

years through the most recent date for which data are available. 

A65. A majority of members believed that there should not be a requirement 

to report foreign holdings of U.S. Treasury debt, for reasons that 

included the following: 

a. It is unclear how the information relates to the fiscal sustainability of 

current policy without change. 

b. Information on foreign holdings of U.S. Treasury debt is based 

upon unaudited, unverifiable surveys rather than transaction 

records and is not available on a timely basis. 

c. A reporting requirement for existing foreign holdings would repeat 

information readily available in other places. 

A66. A majority of respondents agreed with the minority proposal to require 

reporting of foreign holdings of U.S. Treasury debt. Among the 

reasons given were: 

a. This information would show the reader the impact foreign 

countries could have on the U.S. economy. 
Appendix A: Basis for Conclusions 35

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Federal Accounting Standards Advisory Board 

Reporting Comprehensive Long-Term Fiscal Projections for the U.S. Government 

September 28, 2009

b. Trends in the proportion of U.S. Treasury debt held by foreign 

investors are a fundamental user consideration. 

c. This is a very important financial issue that can have significant 

economic, fiscal, foreign relations and even national security 

implications over time. 

d. Graphic information (like the pie chart in #10, Appendix B of the 

ED) regarding trends in the proportion of U.S. Treasury debt held 

by foreign investors (especially foreign countries) should be made 

part of RSI and be subject to the phased-in implementation. The 

respondent feels strongly about this because of our increasing 

reliance on foreign countries to fund our operating deficits at a time 

when the global economy is under great strain and these funds 

may not be available to us in the future as countries like China, 

Japan, and Germany are forced to shore up their own economies, 

especially with further global economic deterioration. 

A67. The Board decided not to include a requirement to report on foreign 

holdings of U.S. Treasury debt for reasons described in 

paragraph A65. 

Alternative Policy Proposals 

A68. A minority of members supported a proposal for additional RSI (not 

subject to the phased-in implementation in paragraph 45) that they 

believed would increase the likelihood that the financial statement and 

disclosures will result in important and necessary decisions. These 

members proposed that if the Comprehensive Long-Term Fiscal 

Projections for the U.S. Government indicate a significant imbalance, 

the basic financial statement should be accompanied by an 

identification of one or more policy alternatives that would close the 

fiscal gap. The identification, explanation, and fiscal impact of the 

policy alternative(s) would be presented as RSI. 

A69. A majority of members believed that there should not be a requirement 

to describe policy alternatives because a statement of accounting 

standards is not the proper venue for requiring policy proposals. 

A70. A majority of respondents agreed with the Board majority view. 

Inter-period or Inter-generational Equity 
Appendix A: Basis for Conclusions 36

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Federal Accounting Standards Advisory Board 

Reporting Comprehensive Long-Term Fiscal Projections for the U.S. Government 

September 28, 2009

A71. The Board also considered information that may be helpful to readers 

in assessing whether financial burdens without related benefits were 

passed on by current year taxpayers to future year taxpayers 

(sometimes referred to as “inter-generational equity” or “inter-period 

equity”). 

A72. In addition to measuring whether projected future receipts are sufficient 

to support projected future spending, it is important to understand how 

the financing of future spending affects current and future-year 

taxpayers. For example, even if projected receipts equal projected 

spending over the time horizon of the projections, policy may be such 

that future-year taxpayers assume a higher burden of taxes or lesser 

public services than current-year taxpayers. 

A73. To present such information, a narrative could explain how measures 

such as debt to GDP over the time horizon of the projection indicate 

the extent that current deficits are left to be financed by future-year 

taxpayers either through increased taxes or decreased benefits. 

A74. While a minority of the Board believed that such disclosures should be 

required, the majority of the Board decided to provide that such 

information is an optional way to meet the disclosure requirement to 

provide information that puts the data into context (see paragraph 42). 

A75. A majority of respondents agreed with the Board majority view. 

Other comments 

A76. Several respondents raised fundamental questions regarding the 

project. One respondent said that unlike private entities, the 

government is sovereign; it has the power to tax and issue money; 

accordingly, the federal government is unlikely to lack sufficient 

budgetary resources to sustain public services and to meet obligations 

as they come due. However, even that respondent noted that 

government spending can indeed become excessive. 

A77. Another respondent said that the concept of sustainability should not 

require assumptions about what the American people want to do. For 

example, if 40 years from now citizens decide that 30 percent of GDP 

may be appropriate to address a large elderly and/or disabled 

population, the Board should not assume that this would be impossible 

or unsustainable. That respondent also said that to show income 
Appendix A: Basis for Conclusions 37

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Federal Accounting Standards Advisory Board 

Reporting Comprehensive Long-Term Fiscal Projections for the U.S. Government 

September 28, 2009

taxes as a flat percentage of GDP while we show the cost of 

entitlements rising with the law is inconsistent and shows an 

unintended bias. That respondent indicated that even a very small 

adjustment would put Social Security into balance. 

A78. The Board decided that the proposed standard may not have made it 

sufficiently clear that the reporting consists of projections and not 

predictions and that the final Statement of Federal Financial 

Accounting Standards (SFFAS) should explicitly explain the difference 

between projections and predictions. The following language was 

added to paragraph 39.c: 

[39] Disclosures should include an explanation of the following 

limitations: 

[c] Projections are not forecasts or predictions; they are 

designed to answer the question “what if?” – for example, what 

would be the impact on federal borrowing if current policies 

without change were continued for a long period of time? 

Board Approval 

A79. This statement was approved for issuance by all members of the 

Board. The written ballots are available for public inspection at the 

FASAB office. 
Appendix B: Example Formats and Illustrations 38 

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Federal Accounting Standards Advisory Board 

Reporting Comprehensive Long-Term Fiscal Projections for the U.S. Government 

September 28, 2009

Appendix B: Example Formats and Illustrations 

The examples in this Appendix are illustrative only; they do not 

represent authoritative guidance. 

Basic Financial Statement 

Long-Term Fiscal Projections for the U.S. Government 

Amounts projected to 75 years 

As of XXXX XX , 

20XX (Current 

Year) 

As of XXXX XX, 

20XX (Prior 

Year) 

Change from Prior 

Year 

PV 

Dollars 

in 

trillions 

% of 

the 

PV of 

GDP* 

PV 

Dollars 

in 

trillions

% of 

the 

PV of 

GDP* 

PV 

Dollars 

in 

trillions 

 % of 

the 

PV of 

GDP* 

Receipts 

Medicare $ XX.X X.X% $ XX.X X.X% $ X.X X.X% 

Social Security XX.X X.X% XX.X X.X% X.X X.X% 

All Other Receipts XX.X X.X% XX.X X.X% X.X X.X%

Total Receipts $ XXX.X X.X% $ XX.X X.X% $ X.X X.X% 

Non-Interest Spending 

Medicare $ XX.X X.X% $ XX.X X.X% $ X.X X.X% 

Medicaid XX.X X.X% XX.X X.X% X.X X.X% 

Social Security XX.X X.X% XX.X X.X% X.X X.X% 

Major Program A X.X X.X% XX.X X.X% X.X X.X% 

Major Program B X.X X.X% XX.X X.X% X.X X.X% 

Rest of Federal Government** XX.X X.X% XX.X X.X% X.X X.X%

Total Non-Interest Spending $ XXX.X X.X.% $ XX.X X.X% $ X.X X.X% 

 

Non-Interest Spending in 

Excess of Receipts $ XX.X X.X% $ XX.X X.X% $ X.X X.X%

To maintain the current [or date] level of U.S. Treasury debt held by the public to GDP, actions would need to 

be taken to increase receipts or decrease non-interest spending by a net present value of $XX.X trillion or X% 

of GDP. To accomplish this reduction, annual receipts would need to increase by XX.X% or annual noninterest spending would have to decrease by XX.X% (or some combination of these two options). 

Note: Amounts are estimated based upon guidance for selecting assumptions provided in this Statement. 

Receipts and non-interest spending include repayment of borrowings from the trust fund accounts for Social 

Security and Medicare (estimated as 0.X percent of GDP). 

* GDP (Gross domestic product) can be roughly defined as all of the nation’s income or everything the 

country produces. 

** Rest of government: The repayment of borrowings by the general fund from the trust fund accounts for 

Social Security and Medicare are included in Receipts for Social Security and Medicare, and Non-Interest 

Spending for Rest of government. 
Appendix B: Example Formats and Illustrations 39 

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Federal Accounting Standards Advisory Board 

Reporting Comprehensive Long-Term Fiscal Projections for the U.S. Government 

September 28, 2009

Examples of Selected Narrative and Graphics 

The following examples display and/or describe narrative and graphics that might 

supplement the basic financial statement in a manner consistent with the standard. 

These illustrations are illustrative only and do not represent authoritative 

guidance. Illustrations are not provided for all requirements. 

Examples are provided in this appendix for the following: 

1. Rising Cost of Health Care .................................................................................................................39

2. Demographic Trends ..........................................................................................................................42

3. Relationship of Projected Receipts and Spending .............................................................................44

4. Trends in Deficit Spending..................................................................................................................45

5. Trends in Treasury Debt Held by the Public.......................................................................................46

6. Impact of Delaying Action...................................................................................................................47

7. Alternative Scenarios (Range Information).........................................................................................48

8. Fiscal Gap...........................................................................................................................................48

9. Disclosure on Funding Mechanisms...................................................................................................49

10. Other Required Information ..............................................................................................................49

1. Rising Cost of Health Care

Paragraph 41.b provides that RSI should explain and illustrate major factors that are 

expected to have a significant impact upon future receipts and spending. For example, if 

rising federal spending on health care is a major factor in the long-term spending 

projections, the disclosure might include the following: 

a. If the growth in health care spending exceeds the growth in GDP, a narrative 

might explain that the growth in any spending program cannot continue 

indefinitely to exceed the growth in the economy, because at some point, the 

spending would exceed the resources that can be extracted from the 

economy. 

b. A range encompassing projections for major factors affecting future spending 

such as the rising cost of health care might be presented in a graphic as a 

percentage of GDP. The graphic could use the example format in Illustration 

1a or other formats 
Appendix B: Example Formats and Illustrations 40 

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Federal Accounting Standards Advisory Board 

Reporting Comprehensive Long-Term Fiscal Projections for the U.S. Government 

September 28, 2009

Illustration 1a: Major Cost Drivers for Federal Spending 

Federal Spending for Medicare and Medicaid as a Percentage of Gross Domestic 

Product Under Different Assumptions About Excess Cost Growth 

Source: Congressional Budget Office, The Long-Term Outlook for Health Care Spending

(November 2007) Figure 5, page 15. Available at: http://www.cbo.gov/ (accessed May 7, 2009) 

“Excess Cost Growth” refers to the number of percentage points by which the growth of annual 

health care spending per beneficiary is assumed to exceed the growth of nominal gross 

domestic product per capita. 
Appendix B: Example Formats and Illustrations 41 

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Federal Accounting Standards Advisory Board 

Reporting Comprehensive Long-Term Fiscal Projections for the U.S. Government 

September 28, 2009

In addition, a graphic might display the relative contribution of two or more major cost 

drivers. For example, Illustration 1b displays the effect of the aging of the population, 

excess cost growth, and the interaction of those two factors on federal spending on 

Medicare and Medicaid. 

Illustration 1b: Relative Contribution of Two Major Cost Drivers 

Allocation of Projected Growth in Federal Spending on Medicare and Medicaid, by 

Source 

(Percentage of gross domestic product) 

“Excess Cost Growth” refers to the number of percentage points by which the growth of annual 

health care spending per beneficiary is assumed to exceed the growth of nominal gross 

domestic product per capita. 

“Interaction” is the interaction of the aging of the population combined with projected excess 

cost growth. In other words, both conditions (excess cost growth and aging of the population) 

are necessary for the cost growth labeled “Interaction” to occur. 

“Aging” is the projected increase in federal spending on Medicare and Medicaid that is 

attributable solely to the aging of the population. 

Source: Adapted from Figure 1 of "Accounting for Sources of Projected Growth in Federal Spending on 

Medicare and Medicaid," Economic and Policy Issue Brief, May 28, 2008. Available at: 

http://www.cbo.gov (accessed June 1, 2009).
Appendix B: Example Formats and Illustrations 42 

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Federal Accounting Standards Advisory Board 

Reporting Comprehensive Long-Term Fiscal Projections for the U.S. Government 

September 28, 2009

2. Demographic Trends

Paragraph 41.b requires that RSI explain and illustrate the major factors that are 

expected to have a significant impact upon future receipts and spending of the federal 

government, one example of which may be demographic trends. The narrative might 

describe demographic trends and briefly explain the major drivers of change in 

demographic trends, for example, trends in longevity and birth rates, and refer the 

reader to more extensive coverage of the topic in other existing reports, for example, 

the Social Security and Medicare Trustees Reports. The narrative could describe the 

change in the ratio of workers to retirees and how this change relates to long-term fiscal 

outlook for social insurance programs. Alternatively, simple age demographics rather 

than workforce participation could be used (in other words, “over 64” instead of “retired”) 

provided that they are used consistently. 

A simple graphic to accompany and illustrate the narrative may follow the format of the 

example shown below. The illustrative sample format below is called an “age/gender 

pyramid.” The graphic could display two or three age/gender pyramids side-by-side, for 

example: 

1 the current (or other baseline) year minus 50 years; 

2 the current year (or other baseline year, for example, 2000); and 

3 a projection of the current (or other baseline) year plus 50 years. 

Illustration 2: Age-Gender Pyramid 

The Changing Shape of the United States’ Population 

1950

765432101234567

0-4

5-9

10-14

15-19

20-24

25-29

30-34

35-39

40-44

45-49

50-54

55-59

60-64

65-69

70-74

75-79

80-84

85-89

90-94

95+

Percent

% male % female

2000

765432101234567

0-4

5-9

10-14

15-19

20-24

25-29

30-34

35-39

40-44

45-49

50-54

55-59

60-64

65-69

70-74

75-79

80-84

85-89

90-94

95+

Percent

% male % female

2050

765432101234567

0-4

5-9

10-14

15-19

20-24

25-29

30-34

35-39

40-44

45-49

50-54

55-59

60-64

65-69

70-74

75-79

80-84

85-89

90-94

95+

Percent

% male % female

 Source: Social Security Administration, Area Population Statistics. 
Appendix B: Example Formats and Illustrations 43 

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Federal Accounting Standards Advisory Board 

Reporting Comprehensive Long-Term Fiscal Projections for the U.S. Government 

September 28, 2009

The narrative could also discuss the “total dependency” ratio (dependent children plus 

retirees per worker) for each “worker-to-retiree” ratio that is provided in the narrative.33 

The narrative also could provide perspective by explaining that similar demographic 

trends are occurring in other developed countries, and provide examples of developed 

nation(s) projected to have a greater number of retirees per worker than the 

United States, and developed nation(s) projected to have fewer retirees per worker. 

 

33 The European Commission defines the total dependency ratio as the “Population under 15 and over 64 

as a percentage of the population aged 15-64.” European Economy: Special Report 1/2006, page 313. 
Appendix B: Example Formats and Illustrations 44 

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Federal Accounting Standards Advisory Board 

Reporting Comprehensive Long-Term Fiscal Projections for the U.S. Government 

September 28, 2009

Paragraph 41.a requires that RSI explain and illustrate the historical and 

projected trends for a progression of years. Illustrations 3, 4 and 5 display how 

this might be accomplished. 

3. Relationship of Projected Receipts and Spending

The RSI section could include a graphic of the relationship between projected receipts 

and spending for a progression of years, for example beginning 20 years before the 

current year and extending to all future years projected in the basic financial statements. 

Below is an example. 

Illustration 3: Projected U.S. Government Receipts and Spending 

Projected U.S. Government Receipts and Spending

(As a percent of GDP) 

Source: FY 2007 Financial Report of the U.S. Government, Chart H, page 18. Available at 

http://fms.treas.gov/fr/index.html (accessed May 7, 2009).
Appendix B: Example Formats and Illustrations 45 

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Federal Accounting Standards Advisory Board 

Reporting Comprehensive Long-Term Fiscal Projections for the U.S. Government 

September 28, 2009

4. Trends in Deficit Spending

The trends in deficit spending could be graphically displayed as a percentage of GDP 

for a progression of years, for example beginning at least 20 years before the current 

year and extending to all future years projected in the basic financial statement. 

Illustration 4: Projected Deficit/Surplus as a Percentage of GDP 

Projected Deficit (Surplus) as a 

Percentage of GDP

-10

0

10

20

30

40

50

1980 1990 2000 2010 2020 2030 2040 2060 2080

Historical Projected

Data sources: 

Historical: Office of Management and Budget, Table 13-2, Chapter 13, “Stewardship,” Analytical 

Perspectives, FY 2008 Budget 

Projections: Government Accountability Office, Long-Term Fiscal Simulation Data, Alternative Scenario. 

Available at: http://www.gao.gov/special.pubs/longterm/data.html (accessed May 7, 2009) 
Appendix B: Example Formats and Illustrations 46 

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Federal Accounting Standards Advisory Board 

Reporting Comprehensive Long-Term Fiscal Projections for the U.S. Government 

September 28, 2009

5. Trends in Treasury Debt Held by the Public

A graphic could display the projected trends in Treasury debt held by the public as a 

percentage of GDP, for a progression of years beginning at least 20 years before the 

current year and extending to all future years projected in the basic financial statement. 

This graphic could illustrate the assumption that increased borrowing would occur to 

finance the difference between projected receipts and spending. 

Illustration 5: Increase in Federal Debt Held by the Public 

Federal Debt Held by the Public as a 

Percentage of GDP

0

100

200

300

400

500

600

700

800

1980 1990 2000 2010 2020 2030 2040 2060 2080

Historical Projected

Data sources: 

Historical: Office of Management and Budget, Table 13-2, Chapter 13, “Stewardship,” Analytical 

Perspectives, FY 2008 Budget 

Projections: Government Accountability Office, Long-Term Fiscal Simulation Data, Alternative Scenario. 

Available at: http://www.gao.gov/special.pubs/longterm/data.html (accessed May 7, 2009).
Appendix B: Example Formats and Illustrations 47 

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Federal Accounting Standards Advisory Board 

Reporting Comprehensive Long-Term Fiscal Projections for the U.S. Government 

September 28, 2009

6. Impact of Delaying Action

Paragraph 41.c provides that if the projections indicate an excess of projected noninterest spending over projected receipts, RSI should explain and illustrate the likely 

impact of delaying action. A graphic could display the progressive increase in the 

change that would be needed to close the fiscal gap by (a) reducing non-interest 

spending or alternatively (b) by increasing taxes. 

Illustration 6: Impact of Delaying Action 

What are the Costs of Delaying Action? 

How soon action is taken will affect how much the government would have available to 

spend on various priorities. The measures below show, for each of the years 

presented, how much the government would have to immediately and permanently 

either raise receipts or cut non-interest spending – or some combination of the two – to 

close the fiscal gap* if action begins in that year. For example, if action does not begin 

until 2040, non-interest spending would have to be permanently reduced by 59.7% or 

receipts increased by 92.9% (or some combination of the two) relative to 2009 levels of 

spending and receipts. 

*In this projection, “closing the fiscal gap” means to maintain the government’s debt at 

the same size (in relation to the economy) as it was at the beginning of the projection 

period. 

-120

-100

-80

-60

-40

-20

0

20

40

60

80

100

120

Percent increase in revenue

needed to close

the fiscal gap

Percent decrease in spending

needed to close

the fiscal gap

2009

To close the gap

if changes

begin in 2020, 2030 2040

Revenue would need

to increase 54.5% or

Spending

would

need to decrease 37.4%

or some combination

of the two

Source: GAO’s March 2009 Alternative simulation.

30.9

46.1

59.7

43.6

69.8

92.9
Appendix B: Example Formats and Illustrations 48 

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Federal Accounting Standards Advisory Board 

Reporting Comprehensive Long-Term Fiscal Projections for the U.S. Government 

September 28, 2009

7. Alternative Scenarios (Range Information)

Paragraph 41.d provides for the explanation and illustration of alternative scenarios 

consistent with current policy without change. It indicates that a table may be used to 

display alternative scenarios. The following illustration is an example of how such a 

table might be displayed. 

Illustration 7: Alternative Scenarios 

 Statement Alternative 1 Alternative 2 

Receipts: 

 Medicare 

 Social Security 

 All Other 

Total Receipts 

 

Spending: 

 Medicare 

 Medicaid 

 Social Security 

 Major Program A 

 Major Program B 

 Rest of Government 

Total Non-Interest Spending 

 

Non-Interest Spending in Excess of Receipts 

8. Fiscal Gap

Paragraph 38 requires that information about fiscal gap be included on the face of the 

basic financial statement or in the disclosures. The fiscal gap is the change in noninterest spending or receipts that would be necessary to maintain public debt at or 

below a target percentage of GDP. An illustrative narrative disclosure on the face of the 

basic financial statement for the change in non-interest spending or receipts necessary 

is shown on page 38. 

The following is an example of an explanation of the concept of fiscal gap that may be 

useful in putting the information required by paragraph 38 into context: 

How much public debt is sustainable? While many experts agree that 

some level of public debt is reasonable and acceptable, there is no 

universally agreed-upon “sustainable” percentage of debt to GDP. 

However, all experts agree that a continually increasing level of debt to 
Appendix B: Example Formats and Illustrations 49 

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Federal Accounting Standards Advisory Board 

Reporting Comprehensive Long-Term Fiscal Projections for the U.S. Government 

September 28, 2009

GDP is not sustainable. The chart in Note X34 displays how the debt 

as a percentage of GDP has varied over time. Debt was 36.8% of 

GDP as of September 30, 2007, but has risen as high as 109% of GDP 

(during World War II). Many economists believe that persistent debtto-GDP levels over 100% are unhealthy. 

9. Disclosure on Funding Mechanisms

Paragraph 40.f requires a discussion of the different funding mechanisms for major 

programs that are not primarily funded by the government’s general revenues. Below is 

an illustrative disclosure. 

Of the $XX of the net excess of non-interest spending over receipts, $YY relates 

to programs funded by the government’s general revenues and $ZZ relates to 

Social Security (OASDI) and Medicare Part A programs, which are funded by 

payroll taxes and which are not funded in any material respects by the 

government’s general revenues. If payroll and self-employment taxes and 

related assets in the Federal Old-Age and Survivors and Disability Insurance 

(OASDI) Trust Funds or Federal Hospital Insurance Trust Fund (Medicare Part 

A) become insufficient to cover related benefits, as indicated by projections, 

additional funding for each of these two programs would be necessary or 

scheduled benefits would need to be reduced. If the government’s general 

revenues are insufficient to cover both mandated transfers to Medicare Parts B 

and D and spending for other general government programs funded by the 

government’s general revenues, as indicated by the projections, either the 

government’s general revenues or Medicare Parts B and D revenues (premiums 

and state transfers) would need to be increased, spending for Medicare Parts B 

and D and/or other general government spending would need to be reduced, 

and/or additional amounts borrowed from the public. 

10. Other Required Information

The illustrations in the appendix are not all-inclusive. Additional information is required 

by paragraphs 39 - 42 but is not explicitly described or illustrated in this appendix. For 

example, paragraph 39 requires an explanation of the nature and limitations of 

projections. Paragraph 42 requires that the narrative should explain the significance of 

the data presented and put the information into context. 

 

34 See Illustration 5: Trends in Treasury Debt Held by the Public on page 46. 
Appendix C: Frequently Asked Questions 50 

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Federal Accounting Standards Advisory Board 

Reporting Comprehensive Long-Term Fiscal Projections for the U.S. Government 

September 28, 2009

Appendix C: Frequently Asked Questions (FAQs) 

These FAQs were included in the exposure draft to aid respondents. They are not 

required in the CFR. 

FAQ 1. What is “Fiscal Sustainability Reporting”? 

“Fiscal Sustainability Reporting” is the short term for “Comprehensive Long-Term 

Fiscal Projections and Accompanying Narrative and Graphics in the Financial Report 

of the U.S. Government.” 

FAQ 2. What is GDP? 

A nation’s gross domestic product, or GDP, is one of the ways for measuring the 

size of its economy. The GDP of a nation is defined as the market value of all final 

goods and services produced within a country in a given period of time. The most 

common approach to measuring and understanding GDP is the expenditure method: 

GDP = consumption + investment + government spending + (exports − imports) 

FAQ 3. a. What is the debt-to-GDP ratio? b. Why does the debt-to-GDP ratio 

matter? 

a. The debt-to-GDP ratio, for the purposes of federal financial reporting, is the 

amount of federal (Treasury) debt held by the public divided by GDP. [An 

alternative ratio would be the amount of total public debt (federal, state, and 

local) divided by GDP.] 

b. The debt-to-GDP ratio provides an indication of a nation’s ability to repay its 

public debt by comparing the size of its debt to the size of its economy. For 

example, during the formation of the European Union (EU), one of the 

conditions for initial membership in the EU, which included eligibility to 

convert its currency to the Euro, was that each nation had to meet certain 

conditions, including debt-to-GDP ratio. Generally, higher debt-to-GDP 

ratios are believed to result in lower economic growth and private investment 

as well as higher interest costs. Many economists believe that persistent 

debt-to-GDP levels over 100% are unhealthy. In addition, the debt-to-GDP 

ratio cannot continue to rise indefinitely, because at some point (although the 

precise point at which this would occur is unknown) the world’s financial 

markets would likely cease lending to the U.S. government. 

FAQ 4. What is present value? 

Present value represents the amount of money that if invested today would grow to 

a specified amount in the future. Present value is an adjusted amount that takes the 

“time value of money” into consideration. The “time value of money” is illustrated by 

a question such as: “At ten percent interest (compounded annually), how much do I 

need to put into the bank today in order to have $110 one year from today?” The 
Appendix C: Frequently Asked Questions 51 

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amount you would need today would be $100. Therefore, the present value of $110 

in this example would be $100. 

In present value calculations, the further out in the future the needed amount, the 

smaller the amount you would need today. In the first year, you earn interest on the 

amount that you deposit (the “principal” amount). In the second year, you earn 

interest on both the original principal amount and the amount of interest that was 

earned in year one. In year three, you would earn interest on: 

• the original principal amount, plus 

• the interest earned in year one on the principal amount, 

• the interest earned in year two on the principal amount, and 

• the interest earned in year two on year one’s interest earnings. 

This is colloquially called “the magic of compounding.” If inflation is less than the 

rate of interest earned (in this example, ten percent per year), the “magic of 

compounding” is an advantage to the party that is earning the interest. 

FAQ 5. What are projections? 

A projection is the calculation of future data based upon the application of trends to 

present data. Projections of deficits, or surpluses, and debt are a central feature of 

Fiscal Sustainability Reporting. Projections are not forecasts or predictions; they are 

designed to depict results that may occur under various conditions–for example, 

what if current policy without change regarding federal government public services 

and taxation are continued in the future? Projections are useful in order to display 

alternative future scenarios, but it is important to clearly explain the nature of the 

information being presented. 

FAQ 6. What factors affect projections? 

Projections are affected by three kinds of assumptions: policy assumptions, 

economic assumptions, and demographic assumptions. 

o Policy assumptions address the factors under the direct control of the federal 

government concerning the taxes and other receipts to be received by the 

federal government and the public services to be provided by the federal 

government. Policy assumptions address projected spending rules for both 

mandatory and discretionary spending as well as the framework for assessing 

taxes and fees. 

o Economic assumptions address the economic factors that are not under the 

direct legislative control of the federal government (for example, inflation and 

growth in GDP). 

o Demographic assumptions address projected population trends (for example, 

birth rates, mortality rates, and net immigration). 

Projections are also affected by uncertainty. The uncertainty may be demonstrated 

by providing alternative scenarios consistent with current policy without change. 
Appendix C: Frequently Asked Questions 52 

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FAQ 7. What is the nature of accounts designated as “trust funds” in the budget of 

the federal government? 

A trust fund account, as the term is used in the budget of the federal government, is 

a type of account designated by law as a trust fund, for receipts earmarked for 

specific purposes and the expenditure of those receipts. Hence the meaning of the 

term differs significantly from its meaning in the private sector. For example, a trust 

in the private sector necessarily involves a fiduciary relationship. In the Federal 

government, despite the legislative requirement that the funds be earmarked, 

earmarked funds (often titled “trust funds” in the federal budget) are distinct from 

fiduciary activities.35 

Moreover, in order to reduce confusion between accounts designated as “trust 

funds” in the budget of the federal government (such as the trust fund accounts for 

Social Security and Medicare) and private-sector trust funds, FASAB’s Statement of 

Federal Financial Accounting Standards (SFFAS) 27, Identifying and Reporting 

Earmarked Funds, prohibits the use of the term “trust fund” for earmarked funds 

(federal “trust funds”) except when referring to the legal title of the fund. SFFAS 27 

also requires the following note disclosure when accounts designated as “trust 

funds” in the budget of the federal government use their excess funds to buy 

Treasury securities: 

• The U.S. Treasury does not set aside assets to pay future expenditures 

associated with earmarked funds. Instead, the cash generated from 

earmarked funds is used by the U.S. Treasury for general government 

purposes. 

• Treasury securities are issued to the earmarked fund as evidence of 

earmarked receipts and provide the fund with the authority to draw upon 

the U.S. Treasury for future authorized expenditures. (For some funds, the 

drawdown is subject to future appropriation). 

• Treasury securities held by an earmarked fund are an asset of the fund 

and a liability of the U.S. Treasury, so they are eliminated in consolidation 

for the U.S. government-wide financial statements. 

• When the earmarked fund’s Treasury securities are redeemed to make 

expenditures, the U.S. Treasury will finance those expenditures in the 

same manner that it finances all other expenditures.36 

 

35 Fiduciary Activities are defined in SFFAS 31, Accounting for Fiduciary Activities. 36 See SFFAS 27, Identifying and Reporting Earmarked Funds, paragraphs 16 and 27. 
Appendix D: Abbreviations 53 

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Appendix D: Abbreviations 

CBO Congressional Budget Office 

CFR Consolidated Financial Report of the U.S. Government 

ED Exposure Draft 

FAQ Frequently Asked Question 

FASAB Federal Accounting Standards Advisory Board 

FY Fiscal Year 

GAAP Generally Accepted Accounting Principles 

GAO Government Accountability Office (formerly, General Accounting Office) 

GDP Gross Domestic Product 

IPSASB International Public Sector Accounting Standards Board 

OASDI Old Age, Survivors and Disability Insurance (Social Security) 

OECD Organisation for Economic Co-Operation and Development 

OMB Office of Management and Budget 

RSI Required Supplementary Information 

SFFAC Statement of Federal Financial Accounting Concepts 

SFFAS Statement of Federal Financial Accounting Standards 

SOSI Statement of Social Insurance 

U.S. United States 
Appendix E: Fiscal Sustainability Reporting Task Force 54 

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Appendix E: Fiscal Sustainability Reporting Task Force 

The FASAB acknowledges with gratitude the invaluable expertise and support of the 

Fiscal Sustainability Reporting Task Force participants. 

The views expressed in this standard represent the views of the FASAB members and 

should not be attributed to the Task Force participants or to their organizations. 

Members of Congress

The Honorable James Cooper, D-TN 

The Honorable K. Michael Conaway, R-TX 

Federal Government Participants

James Duggan, PhD, Senior Economic Advisor for Social Security, Office of Economic 

Policy, Department of the Treasury 

Patrick Locke, Chief, Budget Analysis Branch, Office of Management and Budget 

Robert B. Anderson, Senior Economist, Office of Management and Budget 

Stephen Goss, Chief Actuary, Social Security Administration 

Richard Foster, Chief Actuary, Centers for Medicare and Medicaid Services 

Thomas McCool, PhD, Director, Center for Economics, Government Accountability 

Office 

Benjamin R. Page, PhD, Principal Analyst, Macroeconomic Analysis Division, 

Congressional Budget Office 

Non-Government Participants

Joseph Antos, PhD, Wilson H. Taylor Scholar in Health Care and Retirement Policy, 

American Enterprise Institute 

Allen Schick, PhD, Visiting Fellow in Governance Studies, Brookings Institution 

Jagadeesh Gokhale, PhD, Senior Fellow, Cato Institute 

Robert Bixby, JD, Executive Director, Concord Coalition 

Paul Posner, PhD, Director, Master’s in Public Administration Program, George Mason 

University 

Gary Kreps, PhD, Chair, Department of Communication, George Mason University 

Sheila Weinberg, CEO and Founder, Institute for Truth in Accounting 

C. Eugene Steuerle, PhD, Senior Fellow, Urban Institute 
Appendix F: Glossary 55

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Appendix F: Glossary 

Current Policy Without Change – In federal financial reporting, “current policy 

without change” refers to the continuation of policies in place as of the valuation date 

(in other words, no policy change). 

Debt-to-GDP Ratio – The debt-to-GDP ratio, for the purposes of federal financial 

reporting, is the amount of federal (Treasury) debt held by the public divided by 

gross domestic product. [An alternative ratio would be the amount of total public 

debt (federal, state, and local) divided by GDP.] 

Demographic Assumptions – Demographic assumptions address projected 

population trends (for example, birth rates, mortality rates, and net immigration). 

Discretionary Spending – In the federal budget process, “discretionary spending” 

refers to outlays from budget authority that is controlled by annual appropriation 

acts. Annual appropriation acts are required to fund the continuing operation of all 

federal programs that are not “mandatory.” For additional information, see A 

Glossary of Terms Used in the Federal Budget Process, GAO-05-734SP. 

Earmarked Revenue (or Earmarked Funding) – Earmarked revenue is revenue 

that comes from a source that is distinct from general tax revenues and may be used 

only for the purpose for which it is collected. Examples of earmarked revenue are: 

Social Security taxes, Medicare taxes, Federal Unemployment taxes, and federal 

excise taxes on gasoline. 

Earmarked revenue is generally accounted for in the budget separately, in accounts 

categorized as “special funds” or “trust funds.” The distinction of whether an 

earmarked fund is categorized in the budget as a “special fund” or a “trust fund” is 

determined by the applicable legislation. In order to reduce confusion between 

accounts designated as “trust funds” in the budget and private-sector trust funds, 

FASAB’s Statement of Federal Financial Accounting Standards (SFFAS) 27, 

Identifying and Reporting Earmarked Funds, prohibits the term “trust fund” for 

earmarked funds except when referring to the legal title of the fund, and requires the 

following note disclosure for investments in Treasury securities for earmarked funds 

to explain the nature of funds that are designated as “trust funds” in the budget of 

the federal government: 

• The U.S. Treasury does not set aside assets to pay future expenditures associated 

with earmarked funds. Instead, the cash generated from earmarked funds is used 

by the U.S. Treasury for general government purposes. 

• Treasury securities are issued to the earmarked fund as evidence of earmarked 

receipts and provide the fund with the authority to draw upon the U.S. Treasury for 

future authorized expenditures (although for some funds, this is subject to future 

appropriation). 
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• Treasury securities held by an earmarked fund are an asset of the fund and a 

liability of the U.S. Treasury, so they are eliminated in consolidation for the U.S. 

Government-wide financial statements. 

• When the earmarked fund’s Treasury securities are redeemed to make 

expenditures, the U.S. Treasury will finance those expenditures in the same 

manner that it finances all other expenditures.37 

Economic Assumptions – Economic assumptions address the economic factors 

that are not under the direct legislative control of the federal government (for 

example, inflation and growth in GDP). 

Fiscal Gap – The fiscal gap is the change in non-interest spending and/or receipts 

that would be necessary to maintain public debt at or below a target percentage of 

GDP. The fiscal gap is the net present value of projected non-interest spending38

minus projected receipts, adjusted by the decrease (or increase) in public debt 

required to maintain public debt at the target level for the stated projection period. 

The fiscal gap may be expressed as:

(a) a summary amount in present value dollars, 

(b) a share of the present value of the GDP39 for the projection period, and/or 

(c) a share of the present value of projected receipts or projected non-interest 

spending.

Fiscal Sustainability Reporting – In federal financial reporting, “Fiscal 

Sustainability Reporting” is the short term for the basic financial statement, 

disclosures and Required Supplementary Information required in the Financial 

Report of the U.S. Government. 

Gross Domestic Product (GDP) – A nation’s gross domestic product is one of the 

ways for measuring the size of its economy. The GDP of a nation is defined as the 

total market value of all final goods and services produced domestically during a 

given period of time. The components of GDP are: 

GDP = private sector consumption and investment + government consumption and 

investment + net exports (exports − imports). 

Mandatory Spending – “Mandatory spending” includes entitlement authority (for 

example, Social Security and Medicare and payment of interest on the national 

debt). Congress controls mandatory spending by controlling eligibility and setting 

benefit and payment rules, rather than by annual appropriation acts. For additional 

 

37 SFFAS 27, paragraph 27. 38 Since interest is factored into the present value calculation, the fiscal gap as a share of spending is 

expressed as a share of spending excluding interest. 

39 GDP is the total market value of goods and services produced domestically during a given period. The 

components of GDP are consumption (both household and government), gross investment (both private 

and government), and net exports. 
Appendix F: Glossary 57

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information, see A Glossary of Terms Used in the Federal Budget Process, GAO-05-

734SP. 

Policy Assumptions – Policy assumptions address the factors under the direct 

control of the federal government concerning the taxes and other receipts to be 

received by the federal government and the public services to be provided by the 

federal government. Policy assumptions address projected spending rules for both 

mandatory and discretionary spending as well as the framework for assessing taxes 

and fees.

Present Value – Present value represents the amount of money that if invested 

today would grow to a specified amount in the future. Present value is an adjusted 

amount that takes the “time value of money” into consideration. The “time value of 

money” is illustrated by a question such as: “At ten percent interest (compounded 

annually), how much do I need to put into the bank today in order to have $110 one 

year from today?” The amount you would need today would be $100. Therefore, 

the present value of $110 in this example would be $100 

Projections – A projection is the calculation of future data based upon the 

application of trends to present data. Projections of deficits, or surpluses, and debt 

are a central feature of Fiscal Sustainability Reporting. Projections are not forecasts 

or predictions; they are designed to depict results that may occur under various 

conditions–for example, what if current policy without change regarding federal 

government public services and taxation are continued in the future? Projections 

are useful in order to display alternative future scenarios, but it is important to clearly 

explain the nature of the information being presented. 

Public Services – In federal financial reporting, “public services” refers to all goods, 

benefits and services provided by the government. Federal public services include 

but are not limited to the provision of goods, cash (such as Social Security benefits) 

or other financial benefits (such as loan guarantees), as well as national defense, 

national security, transportation safety and the operation of national parks. 

Required Supplementary Information (RSI) – Information that a body that 

establishes generally accepted accounting principles (GAAP) requires to accompany 

basic information. When an auditor is engaged to audit an entity’s financial 

statements, basic information is subject to testing for fair presentation in conformity 

with GAAP. However, RSI for federal entities is unaudited but subject to certain 

procedures. 

Trust Fund Accounts – In the federal government, trust fund accounts are 

accounts that are designated by law as “trust funds,” for receipts earmarked for 

specific purposes and the associated expenditure of those receipts. Collections may 

come from the public (e.g., earmarked taxes or user charges) or from intra-
Appendix F: Glossary 58

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budgetary transfers. More than 150 federal government trust fund accounts exist, of 

which the largest and best known finance several major benefit programs (including 

Social Security and Medicare) and certain infrastructure spending (the Highway and 

the Airport and Airway Trust Funds). 
FASAB Board Members 

Tom L. Allen, Chair 

Congressional Budget Office 

Robert F. Dacey 

John A. Farrell 

Nancy Fleetwood 

Norwood J. Jackson, Jr. 

James M. Patton 

Alan H. Schumacher 

Harold I. Steinberg 

Danny Werfel 

In Memory of Robert Paul Murphy

 Robert Paul Murphy, who passed away on August 12, 2008, was the 

Congressional Budget Office's General Counsel and served as the CBO's 

representative on FASAB. 

 Mr. Murphy was an active participant in the FASAB's deliberations during 

his tenure on the Board. He provided helpful insight regarding the CBO's 

long-term projections that advanced the Board's work on this Statement. 

Even more importantly, Mr. Murphy exhibited a quality of leadership that 

brought people together, a spirit of caring for others, and a commitment to the 

service rendered by the Board to the American people. He is greatly missed 

by the members and staff of the Board. 

FASAB Staff 

Wendy M. Payne, Executive Director 

Project Staff 

Eileen W. Parlow 

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