Letter of Comment No. 17
File Reference No. 3-20E
Date Received: 9/30/13
September 25, 2013
Director of Research and Technical Activities
Project No. 3-14
Governmental Accounting Standards Board
401 Merritt 7
PO Box 5116
Norwalk, CT 06856-5116
Dear Sir or Madam,
The Michigan Government Finance Officers Association has reviewed the June 3, 2013 exposure draft
entitled “Measurement of Elements of Financial Statements”. We offer the following comments and
observations:
In order to add clarity, we suggest adding a definition to the term “reliable”. We believe that the
definition should include the concept of “verifiability”. We suggest that the Board add the following or
similar language to paragraph 23: “Information is reliable if two reasonable people applying the same
standards are likely to come up with similar amounts and the information is auditable”.
We suggest that the Board consider “weighting” the qualitative characteristics presented on pages six and
seven. For example, we think that “reliability” trumps “relevance”, etc. We think that the preferred order
of importance is:
1.
2.
3.
4.
5.
6.
Cost-Benefit Limitations
Reliability
Understandability
Relevance
Timeliness
Comparability
Generally, the order above would prevail, but we understand that certain categories of assets and
liabilities may lend themselves to a different weight of characteristics. We suggest that the Board review
each category of assets and liabilities to determine the appropriate weight of the characteristics.
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Letter of Comment No. 17
File Reference No. 3-20E
Date Received: 9/30/13
We suggest the Board add the term “certain” in the second to last sentence of paragraph 25 in order to
clarify that the statement is not necessarily true for all residential real estate. The revised sentence would
read “The markets for common types of vehicles or certain residential real estate are examples.”
The first sentence of paragraph 29 reads as an absolute statement that we do not believe to be absolutely
true. We suggest the Board add qualifying language. The new sentence might read “Remeasured
amounts might, in the right circumstances, provide greater comparability than initial amounts…”
Similarly, in paragraph 38, we suggest the Board add the following qualifying language; “…provided
information about assets that might, in certain circumstances, be more comparable and useful…”
These comments represent the consensus opinion of the Accounting Standards Committee and have been
approved by our Board of Directors. Thank you for your consideration and the opportunity to express our
points of view.
Very truly yours,
Karen Lancaster, President
Michigan Government Finance Officers Association
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