According to GASB, information essential to placing financial information in the correct context should be reported as which of the following?

• A. Notes to financial statements
• B. Required supplementary information
• C. Management's discussion and analysis
• D. Comparative information

Answer: (B)

GASBDesignates information needed to place the financial statements in context as Required Supplementary Information (RSI). This category is meant to provide context and analysis that helps users understand the numbers in the basic statements, such as budget-to-actual comparisons or pension/OPEB-related schedules, without being part of the statements themselves. Notes to the financial statements cover significant accounting policies and other disclosures, but the purpose of RSI is specifically to supplement the statements with context and interpretation. So the information essential for understanding the financial results is reported as RSI.