Gasb and Fasb Analysis Paper

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Running Head: GASB and FASB Analysis Paper

GASB and FASB Analysis Paper
Henry Holden
Course: ACC/460 Government and Non-Profit Accounting
University of Phoenix
Instructor: Aisha Meeks
Due Date: June 12, 2009

GASB and FASB Analysis Paper
Since 1973, the Financial Accounting Standards Board (FASB) has been the designated organization in the private sector for establishing standards of financial accounting. Those standards govern the preparation of financial statements. They are officially recognized as authoritative by the Securities and Exchange Commission (SEC) (Financial Reporting Release No. 1, Section 101, and reaffirmed in its April 2003 Policy Statement) and the American Institute of Certified Public Accountants (Rule 203, Rules of Professional Conduct, as amended May 1973 and May 1979). Such standards are important to the efficient functioning of the economy because investors, creditors, auditors, and others rely on credible, transparent, and comparable financial information.

The Governmental Accounting Standards Board was created in 1984 as an independent, professional body to establish standards of accounting and financial reporting applicable to state and local governmental entities. It was formed after agreement by the Financial Accounting Foundation, the American Institute of Certified Public Accountants, the Government Finance Officers Association, the National Association of State Auditors, Comptrollers and Treasurers, and the seven organizations representing state and local government officials. The difference between modified accrual accounting and full accrual accounting is that modified accrual accounting is a method under which revenues are recognized in the period they become available and measurable, and expenditures are recognized in the period the associated liability is incurred. Most government accounting follows this method; and full accrual accounting is a system of accounting in which revenues are recorded...
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