In accounting, private companies are treated differently than governmental and non-profit companies. However governmental and non-profit companies use different reporting requirements from the private sector. The requirements for governmental companies use the Government Accounting Standards Board (GASB), whereas profit and non-profit companies use the Financial Accounting Standards Board. This paper will explain the purpose, discus the similarities, and differences between the GASB and FASB.
Governmental Accounting Standards Board (GASB) is the independent organization that improves and establishes the accounting standards for the United States and local governments. It was established in 1984 by an agreement by the Financial Accounting Foundation and ten national associations of local governments. The mission of the GASB is “to establish and improve standards of the state and local governmental accounting and financial reporting that will result in useful information for users of financial reports, and to guide and educate the public and users of those financial reports (GASB 2014).” Their four core values are: independence, integrity, objectivity, and transparency. The GASB is not a governmental entity, and it is a component of the Financial Accounting Foundation which is a private sector not for profit entity. The GASB standards are not federal laws or regulations, and the GASB does not enforcement authority. However, the standards are enforceable through the laws of the individual states and the auditing process. The process of a standard being set is by due process, and the Governmental Accounting Standards Advisory Council consists of thirty members that are appointed by the Financial Accounting Foundation Trustees. Th...
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...ces between FASB and GASB requirements. Journal of Public Budgeting, Accounting & Financial Management, 15(1), 41-65. Retrieved from http://search.proquest.com/docview/205012359?accountid=35796
FASB (2014) Facts about FASB. Retrieved from http://www.fasb.org/jsp/FASB/Page/SectionPage&cid=1176154526495
Fischer, M., & Marsh, T. (2012). TWO ACCOUNTING STANDARD SETTERS: DIVERGENCE CONTINUES FOR NONPROFIT ORGANIZATIONS. Journal of Public Budgeting, Accounting & Financial Management, 24(3), 429-465. Retrieved from http://search.proquest.com/docview/1231407540?accountid=35796
GASB (2014) Mission, Vision, and Core Values. Retrieved from http://www.gasb.org/jsp/GASB/Page/GASBSectionPage&cid=1175804850352
Mcgraw-Hill, Irwin, (2010) Accounting for the Business-Type Activities of State and Local Governments. Retrieved from http://www.mccc.edu/~horowitk/documents/Chap007_001.pdf
Worth, M. (2014). Nonprofit management: Principles and Practice. 3rd Ed. Thousand Oaks, CA: SAGE Publications, Inc.
Financial Accounting Standards Board (FASB). Accounting Standards Codification TM. Financial Accounting Standards Board (FASB), 2010. Web. 16 May 2014.
The FASB Codification will supersede all then-existing non-SEC accounting and reporting standards form on governmental entities. All other non-grandfathered, non-SEC accounting literature not included in the Codification will become non-authoritative.
For example, since they are not organized to pursue profits, nonprofits are more worthy of trust and therefore more reliable. Moreover, nonprofit comprise vast and growing sector of the national economy, and they are a vital partner with government to provide a wide range of social and human services. The American public will continue to value and support the nonprofit sector as long as it satisfies recognized needs not addressed by government or the for-profit sector. During the years, nonprofits sector provided historically valued services that public and private sectors failed to provide, and promoted new ideas, theories and policies to society. And finally, effective and appropriate use of technology is critical to maintaining a nonprofit organization 's accountability and relevance. A nonprofit should manage information with regard for confidentiality, safety, accuracy, integrity, reliability, cost-effectiveness, and legal compliance. A nonprofit should take the opportunity in incorporating the appropriate technology into its work to improve its efficiency, efficacy, and accuracy in the achievement of its
Although codes of ethics encourage better practice, higher standards, and attempt to hold NGOs and nonprofit organizations accountable, they do not include incentives or consequences (Sidel, 2005). However, they do include suggestions and most importantly resources. For example, the National Council of Nonprofits, Ethical Fundraising includes resources for how to handle gifts appropriately, suggestions for transparency, how to decline conditional gifts appropriately, and more. Since one of the largest issues in NGOs and nonprofit organizations includes funding and expenditures, finances are the main focus for codes of ethics. Therefore, one of the key tools for gaining trust and accountability in NGOs and nonprofit organizations is be transparency. The National Council of Nonprofits
One of the most debatable topics in the accounting industry today is the extent in which we should make the financial statements understandable to the general population. The FASB currently gears its reporting standards toward...
The standard that has been revised is intended to address the concerns of financial statements users by changing the reporting criteria for discontinued operations. The FASB believes that the new standard meets the requirement as it reduces the number of disposals that would be included in discontinued operations and also because of more disclosures requirement, will provide information that will be useful to financial statements (Financial Accounting Standards Board, April 2014)
Verbruggen, S., Christiaens, J., & Milis, K. (2011). Can Resource Dependence and Coercive Isomorphism explain Nonprofit Organizations’ Compliance with Reporting Standards? Nonprofit and voluntary sector quarterly, 40(1), 5-32.
Garrison, R. H., Noreen, E. W., & Brewer, P. c. (2010). Managerial Accounting. New York: McGraw Hill/Irwin.
Worth, Michael J. Nonprofit Management: Principles and Practice. 3rd Ed. Copyright 2014 by SAGE Publications, Inc.
... “The Nonprofit Sector: For What and for Whom?” Working Papers of the Johns Hopkins Comparative Nonprofit Sector Project, no. 37. Baltimore: The Johns Hopkins Center for Civil Society Studies, 2000
Financial accounting is the analysis, classification, and recording of financial transactions and reporting such information to respective users especially external users who use the information to make decisions about their engagements with the entity. In financial accounting general purpose financial statements are used for external reporting. The public by standards imposes the development of the statements through respective national professional bodies, International Accounting Standards Board and respective company Acts for various nations.
Private and public accounting has long been discussed and disputed in regards to financial reporting. Since the Financial Accounting Standards Board (FASB) was created in 1973, accountants have called for different accounting regulations for private and public accounting sectors, as private companies do not have the resources to meet the complex requirements of public companies. Private companies currently are not required by law to issue annual or quarterly financial statements (James, 2012). Private companies do, however, have the option to apply the U.S. Generally Accepted Accounting Principles (GAAP), cash basis, or accrual accounting to their financial statements (James, 2012).
The International Accounting Standards Board, (IASB), began life as the International Accounting Standards Committee (IASC) in the 1973. The IASC was created in June 1973 as a result of an agreement by the accountancy bodies of Australia, Canada, France, Germany, Japan, Mexico, the Netherlands, the United Kingdom and Ireland and the United States. These countries constituted the Board of IASC at that time.
Nonprofit managerial accounting adapts the techniques of for-profit analytical analysis to a nonprofit environment to find solutions to managerial