GAB Vs. GASB And The Government Accounting Standards Board

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The Government Accounting Standards Board (GASB) established in 1984, is an independent organization that determines and improves generally accepted accounting principles (GAAP) for U.S. state and local government entities. However, GASB is not a government entity, it is an operating component of the Financial Accounting Foundation (FAF), a private sector not-for-profit entity (GASB, "Facts About GASB "). The accounting and financial reporting standards established by GASB are essential for government entities operate differently than for profit businesses. The Financial Accounting Standards Board (FASB) is another board that establishes GAAP pertaining to private sector accounting. Both GASB and FASB focus to ensure the
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However, they are similar in that they both are independent nongovernmental organizations and their members are both appointed by the FAF (Encyclopedia of Business, 2nd ed.). Both boards have a general purpose to develop, implement and establish financial reporting standards of organizations. Their organizational structure, how they generate revenues, compliance with rules and regulations, and budgetary obligations are some areas where the two boards are fundamentally different (GASB, 2013). The differences between the two boards require separate accounting and financial reporting standards to provide reliable information to its …show more content…
FASB puts greater emphasis on external financial statements to assess an organizations financial performance. In contrast, budgetary and fiscal compliance is a main concern in financial reporting under GASB (Granof, 2011). As a result government organizations must incorporate several mechanics in their financial statements to show the entity has adhered to budgetary mandates, complied with laws and regulations, and followed the provisions of grants and contracts (Granof, 2011). This requires the use of fund accounting for encumbrances and budget to actual data is used to measure and

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