The federal government s consolidated nancial statements contained the following excerpt
The federal government’s consolidated financial statements contained the following excerpt from a note entitled ‘‘Veterans’ Compensation and Pension’’:
The Department of Veterans Affairs (VA) has a liability to veterans or their dependents for compensation benefits (if the veteran was disabled or died from military service–connected causes) or pension benefits for war veterans (if the veteran was disabled or died from non–service connected causes). The note also indicates that the actuarial value of the compensation benefits as of year-end was $235.2 billion; pension and burial benefits was $44.3 billion. In addition, the VA offers medical benefits to veterans. These are provided through VA hospitals, but only to the extent that required facilities are available (except for veterans with service-connected disabilities, who are automatically entitled to medical services). The government makes no guarantees as to level of care and Congress decides annually how adequately the facilities will be funded. Although this chapter did not address veterans benefits, it did raise the related question of whether the government should report a liability for the actuarial value of anticipated Social Security benefits and correspondingly recognize an expense for the benefits as they are “earned” by the beneficiaries.
Suppose that you are the comptroller of the VA. Do you think that the VA should recognize a liability (and a corresponding expense) for each of the following benefits during the years in which the veterans perform their military service (or are injured or die)? Or alternatively, do you think that the liability (and related expense) for the benefits should be recognized only when the payments are actually due or the medical services are actually provided?
1. Payments to be made to veterans or their families as a consequence of disability or death from service connected causes.
2. Pension benefits attributable to non-service-connected causes. (The actual amount of the benefits is tied mainly to need, rather than to length of service, compensation, or rank. These benefits are in addition to the traditional pension benefits available to career military personnel.)
3. Medical benefits to be provided at VA facilities. (The VA makes no promises to veterans as to the availability or level of care. Congress decides annually on the level of funding.)
Be sure to present your response in the context of FASAB established principles or issues under consideration as discussed in the text.

Membership TRY NOW
  • Access to 800,000+ Textbook Solutions
  • Ask any question from 24/7 available
  • Live Video Consultation with Tutors
  • 50,000+ Answers by Tutors
Relevant Tutors available to help