Gasb and Fasb Paper

GASB and FASB Paper

The Governmental Accounting Standards Board (GASB) and the Financial Accounting Standards Board (FASB) are both sources of Generally Accepted Accounting Principles (GAAP) and practices. The GASB and FASB each have their own objectives but also have similarities and differences. Both standards involve using either the modified accrual basis of accounting or the full accrual basis of accounting.

The objective of the GASB is to ensure that the government agencies are held accountable for their financial reporting and the proper use of public resources. The GASB also monitors the budgetary and fiscal compliance of government agencies. The objective of the FASB is decision usefulness with attempts to provide the best information to investors and creditors of non-government agencies.

The similarities of the GASB and FASB are that both standards are centered around making sure that the financial reporting of various agencies are true and accurate and gives the needed information on the financial condition of an organization and the information needed to compare results of their budgets. “GASB and FASB objectives both endorsed the notion that financial reporting encompasses information on service efforts and accomplishments (SEA) (Granof & Khumawala, 2011, p.21).”

Some of the differences of the GASB and the FASB are that the GASB is used by state and local government and the FASB is used by the private sector including the Not-for-profits. There are differences in the recognition of items found on the financial statements as well as the measurement of how the items are included on these statements. The display of financial statements is different with the GASB and the FASB. The GASB requires that assets and liabilities are shown as current and noncurrent whereas the FASB demands that they are placed in order of liquidity. “The coexistence of the two standards boards, each with its