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Q: Our firm issues financial statements that are prepared on an other comprehensive basis of accounting (OCBOA). What are the required disclosures for these types of financial statements?
A: The disclosures for OCBOA financial statements are, for the most part, similar to those for financial statements prepared under generally accepted accounting principles (GAAP). AICPA Professional Standards, Sec. 623 paragraphs .09 and .10, Special Reports (SAS 62) provides some guidance for financial statements prepared on OCBOA. A recent auditing interpretation of Sec. 623 provides additional guidance. OCBOA financial statements should include in the accompanying notes a summary of significant accounting policies that discusses the basis of presentation and describes how that basis differs from GAAP. The differences between GAAP and OCBOA financial statements are not required to be quantified. For example, different depreciation methods are commonly used for financial statements prepared in accordance with GAAP and financial statements that use the federal income tax basis of accounting. A brief description of the differences between the financial and tax depreciation methods...