Accounting Standards Essay

1374 words - 5 pages

The Federal Government, State and Local Governments (SLG), and Not-for-profit organizations (NFP) all have unique objectives and assets under their control. As a result it may not be feasible to develop a single set of accounting standards that accurately represents all of their financial activity in a manner that is useful to concerned parties. To resolve these discrepancies three separate standard setting bodies have been tasked with developing Generally Accepted Accounting Principles (GAAP) for these different organizations: The Federal Accounting Standards Advisory Board (FASAB) for federal accounting, the Governmental Accounting Standards Board (GASB) for SLG, and the Financial Accounting Standards Board (FASB) for NFPs. The different standards created by these organizations all achieve their goals with varying strengths and weaknesses.

Federal Government Accounting
FASAB faces many unique challenges when developing accounting standards for the federal government. The federal government's shear size, ability to manipulate the money supply, and complex issues such as accounting for social security all complicate the task of developing a single standard for representing the government's financial activity. In spite of these obstacles FASAB has managed to provide a standard requiring all agencies to provide similar reports, which can is then consolidated into an individual report. This allows the reader to analyze the whole as well as the contributions of the individual parts.

The greatest strength of FASAB, in my opinion, is its use of performance and accountability reports. These reports require federal organizations to provide logical outcome based metrics that measure the entities ability to achieve its desired effect on society rather than simple outputs of goods or services provided. I believe that this standard, though difficult to properly implement, serves to close the loop between business and government/NFP accounting. FASB applied to businesses has always served to provide a useful metric for the business to achieve its intended objective, maximization of profits. Performance and Accountability Reports, when properly applied, can provide this same service to federal organizations.

At the same time, the federal governments actual implementation of performance standards and report consolidation standards may be one of its weaknesses. A potential difficulty with consolidation of the financial reports and performance metrics of several unique and distinct federal agencies may be an oversimplification of the big picture. This oversimplification can lead to a competition that shifts emphasis from big picture concerns to more trivial matters. This phenomenon can be viewed in the implementation of the "Executive Branch Management Scorecard" which compares specific areas of different federal organizations and assigns colors to them based on their ability to meet given performance standards. This has resulted in organizations...

Find Another Essay On Accounting Standards

FASB Financial Accounting Standards Board Essay

646 words - 3 pages 2009 The Financial Accounting Standards Board initiated the Codification System. The Codification Project was a result of a 5-year process that involved hundreds of professionals and several accounting boards (Financial Accounting Standards Board, p 4, 2009). The Codification System restructured the many topics of US GAAP pronouncements into a consistent structure that accounting professionals use in their daily decisions of a firms financial

Improving Accounting Standards in Australia Essay

2739 words - 11 pages Introduction Intangible assets have become increasingly noticeable with accounting due to the larger amounts linked to patents, franchises and brands. Although these items are not purchasable they are generated within an organization and sometimes account for huge differences between market capitalization and book values. Over the years, the International Accounting Standards Board has focused on the uniformity of accounting standards. However

The World Needs International Accounting Standards

769 words - 3 pages Financial reporting has a responsibility to communicate the economic condition and functioning of an enterprise. This has to be accurate, reliable and comply by the accounting standards. Effective financial reporting is essential in maintaining confidence in an economy and encouraging investors to invest. Towards the end of 2008, the financial sector across the world was becoming increasingly unstable. Lehman Brothers had been declared

CHAPTER 1 Financial Reporting and Accounting Standards

7652 words - 31 pages Copyright © 2011 John Wiley & Sons, Inc. Kieso, IFRS, 1/e, Solutions Manual (For Instructor Use Only) 1-1 CHAPTER 1 Financial Reporting and Accounting Standards ASSIGNMENT CLASSIFICATION TABLE Topics Questions Cases 1. Global markets. 1 2. Environment of accounting. 2, 3, 4 4, 5, 7 3. Objective of financial reporting. 5, 6, 7, 8, 9, 10 2 4. Standard-setting organizations. 11, 12, 13, 14, 15, 16, 17, 18 1, 3, 6 5. Financial reporting

Governmental Accounting Standards Board 67 and 68

589 words - 3 pages As financial accounting has its set of rules, governmental accounting has its own. Governmental entities in preparing financial statements and related accounting report must follow the rules set by the Governmental Accounting Standards Boards (GASB). On June 25, 2012, in Norwalk, CT, the Governmental Accounting Standards Board has voted two new standards that will considerably change and develop the accounting and financial reporting of public

The Need For Harmonising Accounting Standards

1804 words - 7 pages different national reporting requirements. Several reasons exist for why there are differences in accounting standards among different countries. Some of these include the complexity of accounting in individual countries, the economic and legal framework of the countries themselves, cultural differences among nations and from their historical developments, amongst others (Gottlieb 1996). We now have a global economy and it has affected the

Internationalization of Accounting Standards for Consolidation

2183 words - 9 pages A very good, detailed essay about International Accounting Stds. My instructor said it was the best paper that yearInternationalization of Accounting Standards for ConsolidationJapan: A Case StudyThe purpose of this paper will be to examine problems with internationalization of accounting standards for consolidations on methods from an international perspective - specifically, in the US and Japan. This is an especially timely topic as

The Government Accounting Standards Boards 45

1580 words - 6 pages GASB 45 The Government Accounting Standards Board (GASB) issued Statement 45 (GASB 45) in June 2004; this statement establishes accounting and reporting standards for post-employment benefits other than pensions, or “other post-employment benefits (OPEB),” offered by state and local governments. It requires local governments to actuarially determine their annual required contribution (ARC) to fund OPEB and to account for the unfunded amount as

Asset Measurement, and Accounting Policies and Standards

1073 words - 4 pages using fair value for all assets and add them together, which does not give true value of business. Also even if we try doing this, conceptual framework of AASB and IASB and GAAP and the accounting standards will be meaningless. There will be a emptiness in the accounting system. If historic cost is used as uniform measurement basis, financial industry will protest against the system because financial industry has active markets. Also if present

The Advantages And Disadvantages Of New Accounting Standards IFRS

968 words - 4 pages IntroductionIn 2002, the Financial Reporting Council (FRC) announced that Australia would adopt the accounting standards issued by the International Accounting Standards Board (IASB) from 2005(Baxter 2005). After the first of July 2005, the new standards (IFRS) start to use across national border. companies would be required to report current results under IFRS and restate recent results. They will also have to report their latest results under

A Report on The International Financial Accounting Standards

1112 words - 5 pages highlight the current developments in the relationship between these major players in International Financial Reporting Standards. Many other major capital market standard settlers have since co-existed and cooperated with the stated goal of issuing converged standards. In conclusion this report will outline possible implications that may be taken into account when improving developments for the future of International Financial Accounting Standards

Similar Essays

Adapting International Accounting Standards Essay

1430 words - 6 pages Companies in each country have to adapt and regulate their financial statements to certain requirements. They base and format their accounting standards on their national General Accepted Accounting Principles (GAAP) set by security regulators. However, in this modern globalized era, owing to too many financial differences between nations, it is increasingly difficult for entities to compare their financial records and identify trends in their

Harmonisation Of Accounting Standards Essay

2416 words - 10 pages Harmonisation of accounting standardsInternational accounting harmonisation can be defined as "the process of bringinginternational Accounting Standards into some sort of agreement so that the financialstatements from different countries are prepared according to a common set of principles ofmeasurement and disclosure".Harmonisation means that deviating rules, which do not exclude themselves, can continue toexist next to each other. That means

Ethical Standards In Accounting Essay

684 words - 3 pages associated with the accounting industry, as put in place by the SEC, FASB, and other regulating agencies. It also deals with keeping up with the changes in practice within the industry and the associated regulations and laws governing their work by ongoing education and training.The IMA by enacting these standards and spelling out to their members what is expected of them and of their behavior allows a level of confidence in those certified by its

Government Accounting Standards Board Versus Financial Accounting Standards Board

1295 words - 6 pages In accounting, private companies are treated differently than governmental and non-profit companies. However governmental and non-profit companies use different reporting requirements from the private sector. The requirements for governmental companies use the Government Accounting Standards Board (GASB), whereas profit and non-profit companies use the Financial Accounting Standards Board. This paper will explain the purpose, discus the