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Governmental Accounting Standards Board 34

In: Business and Management

Submitted By Bellawoods
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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...

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