Governmental Accounting Standards Board (GASB) and Financial Accounting Standards Board (FASB) Analysis Paper
Accountants or individuals, who put the financial statements together, need the knowledge of the two different accounting standards board. The Governmental Accounting Standards Board (GASB) and the Financial Accounting Standards Board (FASB) differ from each other and are similar in different ways and individuals need knowledge of the differences and similarities. GASB and FASB allow use of the modified accrual basis of accounting or the full accrual accounting for government and not-for-profit organizations. Knowing the differences between the two methods and the meaning are important.
GASB and FASB Similarities
GASB and FASB accounting are sets of objectives that proprietorship, government, and not-for-profit organizations follow in preparing financial statements. According to Weygandt (2008, p. 17) “both the GASB and the FASB have established objectives that circumscribe the functions of financial reports.” GASB and FASB objectives show whether a company is making enough profit to pay for expenses throughout the year, allows investors information to decide whether to invest or not, and how well the company budget complied throughout the year. Also, the two accounting standard boards show whether management is complying with all aspects of the objectives. GASB and FASB accounting have differences that individuals need knowledge about to prepare financial statements for government and not-for-profit organizations.
GASB and FASB Differences
Accountants and individuals, who work in accounting fields, need to know the differences between GASB and FASB. Knowing the differences allows individuals to know what objectives apply in their organization. One difference between GASB and FASB according to Jacobsen and Wachterhauser (2011) “is the general audience for which each accounting standard is intended for.” GASB reports to interested individuals, whereas...