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. Th...
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...ces between FASB and GASB requirements. Journal of Public Budgeting, Accounting & Financial Management, 15(1), 41-65. Retrieved from http://search.proquest.com/docview/205012359?accountid=35796
FASB (2014) Facts about FASB. Retrieved from http://www.fasb.org/jsp/FASB/Page/SectionPage&cid=1176154526495
Fischer, M., & Marsh, T. (2012). TWO ACCOUNTING STANDARD SETTERS: DIVERGENCE CONTINUES FOR NONPROFIT ORGANIZATIONS. Journal of Public Budgeting, Accounting & Financial Management, 24(3), 429-465. Retrieved from http://search.proquest.com/docview/1231407540?accountid=35796
GASB (2014) Mission, Vision, and Core Values. Retrieved from http://www.gasb.org/jsp/GASB/Page/GASBSectionPage&cid=1175804850352
Mcgraw-Hill, Irwin, (2010) Accounting for the Business-Type Activities of State and Local Governments. Retrieved from http://www.mccc.edu/~horowitk/documents/Chap007_001.pdf
The majorities of financial advisers do not have a formal accounting or tax background and thus have some challenges to overcome when reading tax returns of their clients. However they are still asked to help their clients in future planning. Since most accounting is to be done based on compliance with GAAP it would make sense to think that tax accounting should also be done this way, however both the IRS and the courts have stated that compliance with GAAP is of little significance when dealing with the objectives of tax accounting. The objectives of both accounting methods are simply different, because the primary goal of financial accounting is to provide useful information to all stakeholders and the primary goal of the income tax system is the equitable collection of revenue. Because of these differences it can be said that the users of accounting information are different for both methods. The assumption for financial accounting is the going-concern and the tax accounting system ignores this assumption. These differences give us the concept of timing differences and permanent differences. Understanding...
The goal of the Codification is to simplify the organization of thousands of authoritative U.S. accounting pronouncements issued by multiple standard-setters. To achieve this goal, the FASB initiated a project to integrate and topically organize all relevant accounting pronouncements issued by the U.S. standard-setters including those of the FASB, the American Institute of Certified Public Accountants (AICPA), and the Emerging Issues Task Force (EITF)
To help accounting professionals easily navigate through 50-plus years of unorganized US generally accepted accounting principles (GAAP) and standards the Trustees of the Financial Accounting Foundation approved the Financial Accounting Standards Board (FASB) Accounting Standards Codification (Codification.) By codifying authoritative US GAAP, FASB will provide users with real-time and accurate information in one location. Concurrently, FASB developed the FASB Codification Research System; a web-based system allowing registered users to electronically research accounting issues. Since 2009, the codification became the single source of nongovernmental authoritative GAAP.
VACPA. (2011, September). Budgeting: A Guide for Small Nonprofit Organizations. Virginia Society of Certified Public Accountants. Retrieved from
IASB revenue recognition benchmarks entering the merging venture comprised of two gauges, IAS 18 and IAS 11. IAS 18 worries about revenues including offer of products, administrations, intrigue, eminences and profits. IAS 11 centers around development contracts. Likewise with all IASB gauges, these standard give standards-based direction without particular direction at the exchange level. The guidelines of U.S. GAAP, gave by FASB, then again comprise of an arrangement of more than one hundred revenue related direction of particular principles on an industry and exchange level; in any case, a great part of the general direction is given by Statement of Financial Accounting Concepts No. 5, a non-legitimate wellspring of U.S. GAAP. The IASB and FASB are ready to embrace a joint standard on revenue recognition. This new world standard would adopt an advantage obligation strategy, for example, that of pre-meeting IFRS, while containing more particular direction than IFRS clients are acquainted with seeing, taking a signal from the GAAP guidelines of the United
Australian bookkeeping gauges are set by the Australian Accounting Standards Board (AASB) and have the power of law for Corporations law elements under s 296 of the Corporations Act 2001. They should likewise be connected to all other universally useful monetary reports of reporting elements in general society and private parts.Australian Accounting standards board oversee process of accouting standards if all companies registerd with ASIC complying with these standards and their financial reports are maintend with standards to keep public share holders money in safe hand in past many auditors companies used to ignore accounting standards to give companies actual financial figuers lower or higher to keep their shares prices or investors intact this lead to so many financial crises and collapse of comapanies.The case analyses the high standards required by the accounting profession in line with the requirements of the Australian Standards Board prescription. Further, the case is analyzed technically in line with the accounting standards prescribed by the institute. Here, an employee accountant of a company is asked to iron out the
One of the most debatable topics in the accounting industry today is the extent in which we should make the financial statements understandable to the general population. The FASB currently gears its reporting standards toward...
“The President and CEO of FEI, Colleen Cunningham, ranks revenue recognition in the top 3 financial reporting issues faced by accountants today. In 2006, a survey was conducted in the Financial Accounting Standards Advisory Council and the FASB. Majority of the members in both organizations felt that finding the solutions to the issues regarding revenue recognition should be FASB’s top priority. (Graziano 2005).” In this paper some of the challenges and issues concerning revenue recognition and the procedures set in place by various accounting organizations, including FASB will be discussed.
Dutta, Sunil, and Stefan Reichelstein. Accrual Accounting for Performance Evaluation. Research Paper Series 1886 (2005): 1-35. Print.
Government-wide financial statements are important for us as citizens to find out how one particular state and local governments spend their money (tax revenues). Government- wide financial statements use accounting standard that set by the Government Accounting Standards Board (GASB), and those statements can help us to make our own comparisons between publicly funded activities and how well the government is operating currently in the society. There are two financial statements that have to prepare under the government-wide financial statement: statement of net asset and statement of activities.
These principles were established to provide a common standards to accountants. The rules and regulations were created by the FASAB and the GASB. To guarantee the accuracy and reliability of financial statements professional accounts must follow the accounting cycle of GAAP. FASAB and GASB are the two major bodies that update these principles periodically. The reason for these periodic updates is to address the changes that occur in public bodies and organizations. One of the greatest advantages is that the financial statements from different corporations can be compared. The preventative measures of GAAP reduce risks and provide safeguards to an organization. GAAP help to eliminate fraud and risk through consistent financial reporting. Private and public organization both benefit from the use of the Generally Accepted Accounting Principles. Another important advantage of GAAP is its adaptability. GAAP provides for accurate and consistent reporting. There is no law that requires GAAP to be used. The GAAP guidelines are adhered to by the vast majority of organizations because of its accuracy in financial reporting. The accurate data provided through the use of GAAP helps an organization to achieve their financial objectives. There were no areas of this class that could have yielded additional information for me. The resources that we are provided should be utilized effectively to maximize the learning process. I enjoyed watching the lecture that professor Sheik provided. The live chats are often overlooked yet they embody valuable information which is critical to our success. The discussion board post are provided student engagement which allows one to gain greater clarity on the subject matter. I have enjoyed my learning experience in this class. I wish everyone continued success at Colorado Technical
There are similarities and differences between the financial reporting needs of government/not-for-profit organizations and for-profit organizations. FASB and GASB are similar in the way that they focus on external financial reporting (Lowensohn & Reck, 2016). Individuals are usually in no position to request specific information and must rely on the financial reports disclosed. Both government/not-for-profit organizations and for-profit organizations keep external users in mind when creating external financial documents.
Private and public accounting has long been discussed and disputed in regards to financial reporting. Since the Financial Accounting Standards Board (FASB) was created in 1973, accountants have called for different accounting regulations for private and public accounting sectors, as private companies do not have the resources to meet the complex requirements of public companies. Private companies currently are not required by law to issue annual or quarterly financial statements (James, 2012). Private companies do, however, have the option to apply the U.S. Generally Accepted Accounting Principles (GAAP), cash basis, or accrual accounting to their financial statements (James, 2012).
Financial Accounting Standards Board (FASB). Accounting Standards Codification TM. Financial Accounting Standards Board (FASB), 2010. Web. 16 May 2014.
Financial accounting is the analysis, classification, and recording of financial transactions and reporting such information to respective users especially external users who use the information to make decisions about their engagements with the entity. In financial accounting general purpose financial statements are used for external reporting. The public by standards imposes the development of the statements through respective national professional bodies, International Accounting Standards Board and respective company Acts for various nations.