Running head: GASB AND FASB ANALYSIS PAPER
Governmental Accounting Standards Board (GASB) and Financial Accounting Standards Board (FASB) Analysis Paper
University of Phoenix
ACC 460 / Government and Non-Profit Accounting
March 30, 2010
Governmental Accounting Standards Board and Financial Accounting Standards Board
This paper will be aimed at comparing and contrasting governmental (GASB) which is Governmental Accounting Standards Board and proprietary (FASB) which is Financial Accounting Standards Board accounting. It will explain the objectives of the two standards boards and how they are similar and different. Last it will describe how the modified accrual basis of accounting differs from full accrual accounting.
The GASB sets rules for reporting and financial accounting for entities of local and state government. The FASB sets rules for reporting and financial accounting for entities of private-sector. The relationship between GASB and FASB is that the members to both the boards are appointed by the Financial Accounting Foundation. The Financial Accounting Foundation plays a larger role in the case of GASB. Financial Accounting Foundation also raises funds, gives general oversight of governmental accounting standards and appoints its members. The GASB and the Financial Accounting Foundation get assistance from the Government Accounting Standards Advisory Council. So the role of the government regulation in the application of accounting standards and reporting requirements is substantial.
One situation in a government environment in which FASB standards apply is one in which government entities would be subject to GASB rules; however, if no GASB rule applied then the FASB rules would apply. Currently Financial Accounting Foundation has recommended that government entities would only have to comply with the FASB if the GASB required them to do so. The other situation in a government environment in which...