Premium Essay

Governmental Accounting Standards Board 34

In: Business and Management

Submitted By Bellawoods
Words 774
Pages 4
Governmental Accounting Standards Board 34 What would our country like without any rules and regulations or even our Declaration of Independence? We would probably be one giant disorganized country. There are times when we feel that our government can over regulating, but some fail to understand that the government is the people and society. Society has created organizations that even monitor our own government. One organization is the Governmental Accounting Standards Board (GASB). This is “an authoritative accounting and financial reporting standard-setting body for government entities” (Granof 2002). Their main objective is to ensure that financial reporting needs are meeting for the financial users. This goal is very difficult to accommodate to all users. Therefore, GASB continues to create new standards for financial reporting for state and local governments. One of the recent major obstacles for GASB was to produce standards for full accrual basis accounting for all state, local, and not-for-profit entities. This would allow for cost/loss in an entity’s capital assets and infrastructure. This can be distributed over the useful years of life instead of the initial year. In using the cash method, the value of physical assets and the depreciation on infrastructures such as roads, bridges, sewers, and drainage systems is not shown on the books. On average, most infrastructures decline in usefulness or value over a period of 20 to 50 years. This new standard thus creates GASB Statement Number 34 (GASB 34). Fixed assets have been very troublesome for the governmental financial reporting. Over the years, many states and local governments have failed to keep records of any fixed assets. The GASB 34 requires reporting of all capital and infrastructure assets within three different phases. General Provisions are listed and the Retroactive Reporting and...

Similar Documents

Free Essay

Fasb and Gasb

...Financial Accounting Foundation (FAF) is the organization that has over sight over the FASB, GASB, FASAC and GASAC. Under each of their standards, they both have to look over all letters, comments and concerns before making any decisions and in some cases can be made available to the public. Here is where they differ, the FASB has the authority to make and set any new accounting standards to be put in place, which will be recognized by the Securities and Exchange Committee (SEC). The GASB standards are not recognized to be any formal law or ruling, but its standards can be enforced by the individual states that choose the right to. The GASB is solely public and there is unlimited access. In fact, the GASB encourages the public to become heavily involved in their meetings. You can find some records of what will be discussed through the GASB website on the say the meeting will take place. The FASB reports all nongovernment information that will help private entities make the correct accounting decisions. Under the respective standard process, the FASB houses 7 rules that must be in place, the most important seemingly to be that the Board cares and puts the issues of the stakeholders/shareholders first. As with the GASB, they send those to gather information that can be later studied and hope to be improved. Modified accrual accounting is used to measure the flow of the financial resources. It shows the combination of cash and full basis accrual. Full accrual accounting is......

Words: 393 - Pages: 2

Free Essay

Government Accounting Chapter 1

...Governmental and Nonprofit Accounting: Theory and Practice, 10e (Freeman) Chapter 1 Governmental and Nonprofit Accounting—Environment and Characteristics 1. Which of the following would not be considered a government or nonprofit organization? A. A software company that sells software exclusively to state and local governments. B. A public elementary school. C. A church. D. A private trust organized for charitable purposes. (Answer: A; Easy; LO1) 2. Which of the following activities would most likely be accounted for as a business-type activity? A. Fire protection. B. Recreation. C. Water operations. D. Street maintenance. (Answer: C; Moderate; LO1) 3. Prior to the creation of the Governmental Accounting Standards Board in 1984, which of the following organizations had the greatest influence over accounting concepts, principles, and standards for the state and local governments? A. The National Council on Governmental Accounting (NCGA) B. The National Association of College and University Business Officers (NACUBO). C. The American Institute of Certified Public Accountants (AICPA). D. The Comptroller General of the United States. (Answer: A; Moderate; LO1) 4. Which of the following is considered a health and welfare organization? A. Secondary schools. B. Young Men’s Christian Association (YMCA). C. Child protection agencies. D. United Way. (Answer: C; Easy; LO2) 5. Which of......

Words: 1569 - Pages: 7

Free Essay

Roles for Gasb and Fasb

...Roles of GASB and FASB GASB works to create standards for accounting of state and local governments by determining what pieces of data are necessary to provide useful information to citizens. FASB creates standards for all business and government entities to follow. GASB monitors government entities and sets the standards for local and state governments, while FASB works to help investors and creditors make decisions from the rules regulating the accounting standards of private entities. GASB helps to identify how accounting should be handled for receipts of funds that come from donations, grants, penalties, fines, and taxes. Funds received through business practices would need to be classified under GASB and FASB in government sectors, but if in a private entity it is only required to follow FASB. There are many differences between the GASB and the FASB as to which statements must be used, and for what reasons. As for the GASB a statement of net assets is used in exchange for the FASB’s balance sheet. A similar report called the statement of financial position is available for use by FASB but is not required. Net assets can be recognized under FASB as unrestricted, temporarily restricted, or permanently restricted, while GASB also uses unrestricted and “restricted or invested in capital assets, net of related debt” (GASB). The two boards work hand in hand to make sure that rules are established and updated and standardized for business, government, and non-profits....

Words: 914 - Pages: 4

Free Essay

Homework Week 1 Accounting

...identified in the Governmental Accounting Standards Board's Why Governmental Accounting and Financial Reporting Is—and Should Be—Different. The five environmental differences include mission/purpose, source of revenue, potential longevity, relationship with stakeholders, and role of budget. The mission/purpose is defined by the goals of the organization. The purpose of a commercial business is to make money. A non-profit organization’s purpose is to provide a service, without compensation from the people being served. The source of revenue comes from net income, which comes from a sale of goods or services in the private sector or in the public sector comes from tax dollars or donations. The longevity potential for a private business depends on the ability to generate a profit. In contrast a non-profit relies upon tax dollars or donations. The stakeholders of a private corporation are the owners/stockholder/investors. The stakeholders of a public organization are the taxpayers and general public being served. The budget in the private sector is flexible, depending on revenues and directors. The budget within a public organization is typically not flexible and has to be followed exactly. 1-3. Identify and briefly describe the three organizations that set standards for state and local governments, the federal government, and nongovernmental not-for-profit organizations. FASAB: Federal Accounting Standards Advisory Board provides accounting standards......

Words: 984 - Pages: 4

Premium Essay

Acct 567 Funds, Statements, Taxes, Accounting for Government and Nfp Keller

...ACCT 567 Funds, Statements, Taxes, Accounting for Government and NFP Keller PLEASE DOWNLOAD HERE! HTTP://WWW.STUDENTSWITHSOLUTIONS.COM/VIEW-TUTORIAL.ASPX?TUTORIALID=14604 ACCT 567 Funds, Statements, Taxes, Accounting for Government and NFP Keller 1. Explain the primary differences between ad valorem taxes, such as property taxes, and other taxes that generate derived tax revenues, such as sales and income taxes. How does accounting differ between these classes of taxes? http://www.studentswithsolutions.com/view-tutorial.aspx?TutorialId=14555 2. Can you name the statements which should be prepared by all not-for-profit organizations? http://www.studentswithsolutions.com/view-tutorial.aspx?TutorialId=14558 3. Name a budgetary account of a governmental fund http://www.studentswithsolutions.com/view-tutorial.aspx?TutorialId=14559 4. How are the major funds of a state or local government determined by a governmental entity? http://www.studentswithsolutions.com/view-tutorial.aspx?TutorialId=14556 5. Agency funds pay interest and principal on long term debt? http://www.studentswithsolutions.com/view-tutorial.aspx?TutorialId=14557 6. A refuse collection service can be accounted for by using one of several different funds. The service could be a part of the general fund, it could be a special revenue fund or an enterprise fund. What circumstances would determine which fund would be the most appropriate to......

Words: 1990 - Pages: 8

Premium Essay

Accounting for Government

...Introduction to Accounting and Financial Reporting for Governmental and Not-for-Profit Entities True / False Questions 1. Special purpose governments generally provide a wider range of services to their residents than do general purpose governments. True False 2. Examples of general purpose governments include cities, towns, and public schools that receive tax revenue to finance the services they provide. True False 3. The Governmental Accounting Standards Board (GASB) is the body authorized to establish accounting principles for all state and local governments, both general purpose and special purpose. True False 4. The Governmental Accounting Standards Board (GASB) is the body authorized to establish accounting principles for all government entities. True False 5. The Financial Accounting Standards Board (FASB) is the body authorized to establish accounting principles for all colleges and universities and health care entities. True False 6. Neither governmental nor not-for-profit entities have residual equity that can be distributed to owners. True False 7. A characteristic common to governmental and not-for-profit organizations is that they do not exist to provide goods or services at a profit or profit equivalent. True False 8. The needs of users of government financial reports are the same as those of users of business entity financial reports. True False 9. The Federal......

Words: 6249 - Pages: 25

Premium Essay

Comprehensive Annual Financial Report

...Education issues a Comprehensive Annual Financial Report (CAFR). The most recent report as the 2012 that was created by Alexander Cherniss, Ed.D., Chief Business Officer, fiscal year ending June 30, 2012. Presently no boundary changes during the fiscal year. The purpose of this paper is to provide an overview of government accounting and reporting. Governmental Accounting and Reporting Budgeting and accounting are predominantly vital for a government body. Any person with the competence to make decisions relating to the prevailing body should possess the essential understanding of budgeting and accounting. “The Governmental Accounting Standards Board (GASB) sets the accounting and financial reporting standards for state and local governments, whereas the Financial Accounting Standards Board (FASB) sets these standards in for-profit business” (Granof &Wardlow, 2011). Governmental purpose and missions differ from those of a for-profit business. For-profit business is vastly measured by increasing profits and shareholder worth. Economic metrics are based exclusively on revenue and net income margins, where there may not be as measurable for governmental financial reporting. Government financial report cannot be always measured in monetary trends but more on a service oriented and focus cannot always be measured in dollars and cents and tends to be based more so on service efforts and activities. Additionally, “the actual budget holds more significance in......

Words: 1036 - Pages: 5

Premium Essay

Cafr Budget Analysis

...CAFR BUDGET ANALYSIS 2 CAFR Budget Analysis The Governmental Accounting Standards Board (GASB) and the Financial Accounting Standards Board (FASB) serve similar functions for different accounting entities. The GASB maintains accountability over state and local governments, while the FASB maintains adherence to standards for not-for-profit entities. Both governments and not-for-profit organizations use an expenditure approach to accounting where budgetary needs are the first priority over financial statements. Governments however, have additional reporting items that fall within the purview of the power to summon resources. Governments and not-for-profit entities have a different business model than that of for-profit organizations, because governments and not-for-profit entities primary business goal is something other than profit. Governments differentiate themselves from not-for-profit entities by the ability to use taxes, licenses, and legislature as a means to levy revenue to pay for expenses. Not-for-profit organizations primarily use grants, investments, and contracts to earn revenue (Copley & Engstrom, 2007). Modified Accrual Method Since governments and not-for-profit organizations use a different business model than traditional businesses, a modified accrual method is used to account for assets, liabilities, and capital. The GASB and FASB allow for the creation of individual accounting entities called funds that track the funding and expenses for that entity.......

Words: 730 - Pages: 3

Premium Essay

Acc460( Government and Non-Profit Accounting )Complete Class

...Government and Non-Profit Accounting )Complete Class Click This Link to Get The Tutorial: http://www.myhomeworkspot.com/ACC455-Corporate-Taxation-Complete-Class-002.htm Week 1 Individual Governmental Accounting Standards Board (GASB) and Financial Accounting Standards Board (FASB) Analysis Paper Prepare a 350- to 700-word paper comparing and contrasting GASB and FASB accounting. Explain the objectives of the two standards boards and how they are similar and different. Describe how the modified accrual basis of accounting differs from full accrual accounting. Format your paper consistent with APA guidelines. Discussion Questions DQ 1 Log into http://www.charitynavigator.org/. Choose a good charity and a bad charity and explain why you feel they should labeled good or bad. DQ 2 What is fund accounting? How does it compare to proprietary accounting? Why is fund accounting necessary? What are the major fund types? DQ 3 What are some examples of government and not-for-profit organizations? How do businesses measure success? How do government organizations measure success? DQ 4 What is the purpose of CAFR? What are the components of CAFR? Why is the Federal Government not subject to GASB 34? How do government-wide financial statements add information not available in fund financial statements? Week 2 Individual Ch. 1, 2, & 3 Textbook Exercises Resources: Ch. 1, 2, & 3 of Government and Not-for-Profit Accounting Prepare written......

Words: 1543 - Pages: 7

Premium Essay

Financial Statements and Audit Report Review

...Paulding County, GA Financial Statement / Audit Report Review Government and Not-For-Profit Accounting, ACC 410 November 2, 2014 Financial Statement /Audit Report Review This is the Audit Report Review of the evaluation of the Government-wide Financial Statement and the Fund Financial Statement of Paulding County, Georgia. Under compliance of the Governmental auditing standards, GASB Statement No. 34, Paulding County’s report includes Government-wide financial statements, which include the Statement of Net Assets and the Statement of Activities. Also released by Paulding County is the required second set of statements, the Fund financial statements, that include the Balance Sheet-Governmental Funds, Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Assets, the Statement of Revenues, Expenditures, and Changes in Fund Balances-Governmental Funds, and the statements associated with the other governmental fund categories, general, propriety and fiduciary. The county’s fiscal year ended June 30, 2013 and the reports were released on December 16, 2013 (Paulding County, GA 2013). Mauldin & Jenkins CPA, LLC of Atlanta, Georgia, independently audited the county’s basic financial statements. They audited the business-type activities, the comprehensive discretely presented component units, each major fund, and the aggregate remaining fund information of Paulding County. The component units are either 1) legally separate entities for which......

Words: 1014 - Pages: 5

Premium Essay

Overview of Financial Reporting for State and Local Governments

...4. State and local governments are not required to prepare a CAFR. Answer: True 5. Combining statements are required whenever a non-major column is used in one of the fund financial statements. Answer: True 6. A complete CAFR includes combining financial statements to reflect major funds. Answer: True 7. In addition to the government-wide statements, governments are required to prepare fund financial statements for governmental, proprietary and fiduciary funds. Answer: True 8. In addition to the government-wide statements, governments are required to prepare fund financial statements for governmental funds only. Answer: False 9. The General Fund is not always considered to be a major fund when preparing fund basis financial statements. Answer: False 10. With respect to fund basis financial statements, governmental funds are considered to be a major fund when total assets, liabilities, revenues and expenditures combined are at least 10% of the total for the governmental funds category. Answer: False 11. With respect to fund basis financial statements, a government may only designate a fund to be a major fund if it meets the size thresholds established by GASB. Answer: False 12. With respect to fund basis...

Words: 8043 - Pages: 33

Premium Essay

Case Study

...The County of San Diego CAFR Analysis Introduction The first recorded history of San Diego started when San Diego Bay was first discovered by the Europeans in the present state of California. Native Americans tribe which is named “Kumeyaay” had been living in San Diego area for as long as 12,000 years before the Portuguese explorers discovered this area in 1542. After about 200 years, Father Junipero Serra established the first permanent European settlements in California, so that San Diego is also considered the “birthplace” of California. In 1848, San Diego became a part of the U.S. and was named San Diego County on February 18, 1850. San Diego remained a small town for decades, due to the development and establishment of Military bases, it expanded quickly after 1880. During and after World War II, the economy of San Diego grew rapidly based on the military, defense industries, tourism, international trade, and manufacturing. San Diego County is the most southwestern county in the United State, which located in the southwestern corner of the States of California. Its county seat and largest city is San Diego and it is now the 8th largest city in the United States. According to the estimation by U.S. Census Bureau, San Diego County's estimated population for January 1, 2014 was 3,194,362 people and household population is 1,076,483 (State & County Quick Facts, 2014). An increase of approximately 1.4 % comparing with the estimated 3,150,178 people in January...

Words: 3100 - Pages: 13

Free Essay

Acc 460 Week 1 Dqs

...This document of ACC 460 Week 1 DQs consists of: DQ1: Log into charitynavigator.org/. Choose a good charity and a bad charity and explain why you feel they should labeled good or bad. DQ2: What is fund accounting? How does it compare to proprietary accounting? Why is fund accounting necessary? What are the major fund types? DQ3: What are some examples of government and not-for-profit organizations? How do proprietary businesses measure achievement? How do government organizations measure success? DQ4: What is the purpose of CAFR? What are the components of CAFR? Why is the Federal Government not subject to GASB 34? How do government-wide financial statements add information not available in fund financial statements? Business - Accounting ACC 460 Week 1 Individual Assignment Governmental Accounting Standards Board (GASB) and Financial Accounting Standards Board (FASB) Analysis Paper ACC 460 Week 2 Individual Assignment Ch. 1, 2, 3 Textbook Exercises ACC 460 Week 2 Learning Team Assignment CAFR Budget Analysis ACC 460 Week 3 Individual Assignment Ch. 2, 4, 5, 6 Textbook Exercises ACC 460 Week 3 Learning Team Assignment Ch. 4 6 Textbook Problems ACC 460 Week 4 Individual Assignment Ch. 9 10 Textbook Exercises ACC 460 Week 4 Learning Team Assignment Ch. 5 10 Textbook Problems ACC 460 Week 5 Individual Assignment Accountability in Reporting Memo ACC 460 Week 5 Individual Assignment Ch. 12......

Words: 351 - Pages: 2

Premium Essay

Fasb vs Iasb

...ACC/541 June 6, 2011 Heber W. Howard Abstract This report has been made to explain the direct relationship that the Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB) have and how crucial the unification of these two setting standards entities are in these current days, where financial transactions are expected to perform globally. In addition, it is important to have a Master of Science in accountancy in order to prepare professionals in accounting to provide reliable information for this new environment of economic and financial transactions. The Financial Accounting Standards Board (FASB), a non-governmental entity, was created in 1973, after the wheat committee decided to abolish the Accounting Principles Board (APB) as a result of criticism against the objectivity of members. The FASB consists of seven members, which are selected for renewable periods of five year terms with well-paid full time positions. This entity receives funding from the Securities of Exchange Committee (SEC). According with Kieso, Weigandt and Warfield (2007), the purpose of FASB is “to establish and improve standards of financial accounting and reporting for the guidance and education of the public, which includes issuers, auditors, and users of financial information.” The International Accounting Standards Board (IASB) is a private entity formed in 1973, based in London, England. The IASB is currently formed of fifteen members selected......

Words: 1134 - Pages: 5

Premium Essay

Audit Chapter 1 Answers

...Economy Review Questions 1–1 The “crisis of credibility” largely arose from the number of companies that restated their previously issued financial statements as a result of accounting irregularities and fraud. Especially responsible were the very visible Enron and WorldCom fraud cases. Both companies filed for bankruptcy and constituted the largest companies in American history to do so. The extent of the accounting irregularities and fraud being investigated and disclosed brought into question the effectiveness of financial statement audits. In addition, the criminal conviction of Arthur Andersen, LLP, one of the then Big 5 accounting firms, on charges of destroying documents related to the Enron case brought into question the ethical standards of the profession. 1–2 Assurance services are professional services that enhance the quality of information, or its context, for decision making. The two types are: (a) those that increase the reliability of information and (b) those that involve putting information in a form or context that facilitates decision making. 1–3 A financial statement audit is, by far, the most common type of attest engagement. The overall assertion, made by management, most frequently is that the financial statements follow generally accepted accounting principles. 1–4 A large corporation with securities listed on a stock exchange is required by the rules of the stock exchange and by the rules of the Securities and Exchange......

Words: 5310 - Pages: 22