DODFMR Vol. 6B - The FIAR Drill: Demystifying Financial Statements

DoD FMR Volume 6B, titled “Form and Content of the Department of Defense Audited Financial Statements,” establishes the comprehensive framework and specific instructions for preparing the Department’s quarterly and annual audited financial statements in accordance with Generally Accepted Accounting Principles (GAAP) and OMB Circular A-136. This volume governs the preparation of the Agency Financial Report (AFR) for all DoD consolidation entities, mandating key components such as the Management’s Discussion and Analysis (MD&A), the Financial Section, and Required Supplementary Information (RSI). It prescribes the detailed format and content for the four principal financial statements: the Balance Sheet, the Statement of Net Cost, the Statement of Changes in Net Position, and the Statement of Budgetary Resources. Furthermore, Volume 6B provides rigorous requirements for note disclosures, including specialized reporting for funds from dedicated collections, intragovernmental eliminations, and prior period adjustments. By standardizing reporting procedures—such as specific rounding rules and the mandate for variance analysis of material fluctuations between periods—the regulation ensures the Department's financial data is consistent and reliable, providing the necessary transparency for program managers, Congress, and the public to assess management performance and stewardship