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Gasb and Fasb Analysis Paper

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Gasb and Fasb Analysis Paper
The relationship between the Governmental Accounting Standards Board and the Financial Accounting Standards Board is a tricky one. There has been a long-standing power struggle between the two entities because they are both able to establish generally accepted accounting principals, and they both posses the authority to do so. Because of this problems arise when they provide different answers to the same question. The ideal solution would be to integrate both bodies into a single organization. Unfortunately, with politicians, organizations and institutions who want to stay in control, the only alternative may be to have the Financial Accounting Foundation (FAF) exhort its influence over the FASB and GASB to coordinate their operations
One difference between the two organizations is that the rules of the GASB need not apply to that of FASB. If the GASB had not covered an accounting topic that the FASB had, then the FASB standards would be used by the government entities. Under the rules of the FASB, SFAS No. 87 Employers Accounting for Pension must be followed by the financial entity. This is to establish measurement and display standards related to pensions. GASB No. 4 was issued by GASB, shortly after SFAS No. 87, which concludes that the standards established by SFAS No. 87 do not have to be followed by government entities.
The GASB and the FASB both have the authority to create rules. With the GASB having the ability to create rules that override the FASB, these two organizations may never resolve conflict. If they could coordinate their operations they may be a much more effective rule-making
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