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 similarities, and differences between the GASB and FASB.
Governmental Accounting Standards Board (GASB) is the independent organization that improves and establishes the accounting standards for the United States and local governments. It was established in 1984 by an agreement by the Financial Accounting Foundation and ten national associations of local governments. The mission of the GASB is “to establish and improve standards of the state and local governmental accounting and financial reporting that will result in useful information for users of financial reports, and to guide and educate the public and users of those financial reports (GASB 2014).” Their four core values are: independence, integrity, objectivity, and transparency. The GASB is not a governmental entity, and it is a component of the Financial Accounting Foundation which is a private sector not for profit entity. The GASB standards are not federal laws or regulations, and the GASB does not enforcement authority. However, the standards are enforceable through the laws of the individual states and the auditing process. The process of a standard being set is by due process, and the Governmental Accounting Standards Advisory Council consists of thirty members that are appointed by the Financial Accounting Foundation Trustees. The members of the board serve for a five year term, and they may serve up to ten years. The members are required to have knowledge of governmental accounting and finance (GASB 2014).
The Financial Accounting Standards Board (FASB) is the designated organization for the private sector for non-governmental entities since 1973. The Securities and Exchange Commission (SEC) recognizes the FASB’s standards, and the SEC makes them authoritative. The mission of the FASB is to “establish and improve standards of financial accounting and reporting that foster financial reporting by nongovernmental entities that provides decision useful information to investors and other users of financial reports (FASB 2014).” The FASB is also an independent organization that is different from any other business and professional organization. The FASB has seven members, and they serve full time. They are appointed for five year terms, and are eligible for an additional five year term. The FASB uses due process to implement the process of the standard setting process. The rules for setting or changing standards include; identifying financial reporting issues from stakeholders or other sources, and then the FASB decides whether or not to add the...

Find Another Essay On Government Accounting Standards Board versus Financial Accounting Standards Board

CHAPTER 1 Financial Reporting and Accounting Standards

7652 words - 31 pages which currently establishes and improves financial accounting and reporting standards for the guidance of issuers, auditors, users, and others. (h) SEC. Securities and Exchange Commission. An independent regulatory agency of the United States government which administers the Securities Acts of 1933 and 1934 and other acts. (i) IASB. International Accounting Standards Board. An international group, formed in 2001, that is actively developing and

Adapting International Accounting Standards Essay

1430 words - 6 pages to the need for every country to have a system for regulating their financial reporting. Accounting regulations and standards are subsequently dependent on the legal system used within the country. Indeed, the author states that in some countries, accounting rules emerge from taxation law; they are known as code law countries. Accounting standards are thus embodied within the laws relating to trading entities. The government normally directs

Harmonisation of accounting standards

2416 words - 10 pages harmonisation does not focus on the elimination ofdifferences but on the reduction of contradicting rules. the aim of the international harmonisation process of Accounting Standards is to reduce or overcome differences world-wide, in order to reach a better internationalcomparability of financial statements. Harmonisation has been broken down into two aspects: material and formal harmonisation* material harmonisationMaterial harmonisation refers

Ethical Standards in Accounting

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

A Report on The International Financial Accounting Standards

1112 words - 5 pages . The FASB and the IASB agreed to work collaboratively with each other to improve and converge U.S GAAP and international standards. Current developments: The International Financial Reporting Standards (IFRS) foundation and International Accounting Standards Board (IASB) establishes the Accounting Standards Advisory Forum, with the aim to formalise, rationalise and streamline the relationships amongst both the National Standard Setters and other

Improving Accounting Standards in Australia

2739 words - 11 pages all countries. Sawami, (n.d.), points out that adoption of similar standards internationally will result in a decline in the cost of capital because of an expanded global funding structure as well as alignments between the economic and accounting standards. The federal level of the Australian government formulates the financial reporting and auditing standards for the public, thus they are adopted throughout the country. The International

Financial Accounting versus Managerial Accounting

2039 words - 8 pages (GAAP). In essence, financial accounting follows the unifying concept of the equation, Assets = Liabilities + Owners Equity.Financial accounting regulations are required and must conform to the standards set forth by the generally accepted accounting principles (GAAP). As stated by Marshall, et al (2004), financial accounting is regulated by the Financial Accounting Standards Board (FASB), and, to a lesser degree, the Securities and Exchange

Managerial Accounting versus Financial Accounting

2578 words - 10 pages Final Essay: Accounting 206 Final Essay: Managerial Accounting versus Financial AccountingHeather SpencerAcc 206Instructor Lisa FoleyMay 17, 2010In this essay I will discuss what management accounting is and what the sources of data are. I will also divulge the differences in these accounting methods. In my learning of accounting principles, I have learned that there is a difference between financial accounting and managerial accounting. The

The World Needs International Accounting Standards

769 words - 3 pages under estimated. Another allegation made towards accounting standards was the complexity of the IAS 39. This is the financial instruments recognition and measurement policy, adopted by the International Accounting Standards Board. It has been criticised for being far too complex, as different financial instruments have to valued using different techniques. This has been stated in the Report of the Financial Crisis Advisory Group

The Need For Harmonising Accounting Standards

1804 words - 7 pages Going, Pacioli? Will Accounting Standards Be Harmonised? National Public Account, Nov 96, Vol. 41 Issue 11. HELFERT, E. (1992) Techniques of Financial Analysis 5th ed. Illinois: Richard D. Irwin, Inc. INSTITUTE OF INTERNAL AUDITORS (2004) The Audit Profession and the Environment [Online] available at http://www.theiia.org/ (accessed 20 April 2004). INTERNATIONAL ACCOUNTING STANDARDS BOARD (2004) History [Online] available at http://www.iasb.org

Internationalization of Accounting Standards for Consolidation

2183 words - 9 pages well as the minority interest in those assets are included in the consolidated financial statements. The parent company theory holds that only the parent company's shareholders' ownership interest should be reflected. There are many more detailed controversies in US accounting for consolidations, but this illustrates how even the US, with the most developed set of accounting standards in the world can have disputes about the most fundamental

Similar Essays

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

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

Accounting Standards Essay

1374 words - 5 pages 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

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