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Governmental Accounting Standards Board

GASB to (a) meet the accountability and decision- 1. The Federal Accounting Standards Advisory Board
making needs of the users of government financial (FASAB) was established in 1990 by three U.S. gov-
reports and (b) gain general acceptance among state ernment principals: the Comptroller General, the
and local government preparers and auditors of Director of the Office of Management and Budget,
financial reports. and the Treasurer. FASAB’s primary function is to
3. To establish standards only when the expected benefits make recommendations to the principals for finan-
exceed the perceived costs. GASB strives to determine cial accounting and reporting standards to be
that proposed standards (including disclosure adopted for the U.S. federal government. More
requirements) fill a significant need and that the information is available from FASAB at 441 G
costs they impose, compared with possible alterna- Street NW, Suite 6814, Washington, D.C. 20548,
tives, are justified when compared to the overall (202) 512-7350, or http://www.fasab.gov.
public benefit. 2. The Public Sector Committee of the International
4. To consider the applicability of its standards to the Federation of Accountants (IFAC-PSC) assumed
separately issued general-purpose financial state- responsibility in 1998 for developing a set of finan-
ments of governmentally owned special entities. cial reporting standards to be adopted worldwide by
GASB specifically evaluates similarities of special public sector entities. More information is available
entities and of their activities and transactions in from IFAC-PSC at 545 Fifth Ave., 14th floor, New
both the public and private sectors, and the need, in York, NY, (212) 286-9344, or http://www.ifac.org.
certain instances, for comparability with the private Standard-setting bodies for the private sector are:
sector.
5. To bring about needed changes in ways that minimize 1. The Financial Accounting Standards Board (FASB)
disruption of the accounting and financial reporting also falls under the auspices of the Financial
processes. Reasonable effective dates and transition Accounting Foundation. Its responsibilities are to set
provisions are established when new standards are the financial accounting and reporting standards to
introduced. GASB considers it desirable that change be applied by U.S. businesses. FASB is co-located
should be evolutionary to the extent that can be with GASB in Connecticut and their Web site is
accommodated by the need for understandability, http://www.fasb.org.
relevance, reliability, comparability, and consistency. 2. Financial accounting and reporting standards rec-
6. To review the effects of past decisions for appropriate- ommended for use by businesses throughout the
ness. This permits continual interpretation, amend- world are established by the International Account-
ment, or replacement of standards, when deemed ing Standards Board (IASB). More information is
necessary. available from IASB at Cannon Street, London
EC4M 6XH, United Kingdom; +44 20 7246 6410,
PUBLICATIONS or http://www.iasplus.com.
As of December 31, 1998, more than thirty financial SEE ALSO Government Accounting; Government Finan-
accounting and reporting standards had been issued since cial Reporting
GASB’s inception. A standard pertaining to a new finan-
cial reporting model for state and local governments has
BIBLIOGRAPHY
been exposed and is expected to be issued in 1999 with an
Codification of Governmental Accounting and Financial Reporting
effective date in 2001. Copies of these standards, along
Standards as of June 30, 1998 (1998). Norwalk, CT: Govern-
with other GASB publications, can be obtained from the
mental Accounting Standards Board of the Financial
GASB offices at 401 Merritt 7, P.O. Box 5116, Norwalk, Accounting Foundation.
Connecticut 06856-5116, (203) 847-0700, or Freeman, Robert J., Shoulders, Craig D., and Allison, Gregory S.
http://www.gasb.org. GASB’s Web site is a subpart of the (1996). Governmental and Nonprofit Accounting: Theory and
FASB (Financial Accounting Standards Board) Web site. Practice (8th ed.) Upper Saddle River, NJ: Pearson Education
Inc.
OTHER FINANCIAL ACCOUNTING Wilson, Earl R., and Kattelus, Susan C. (2004). Accounting for
AND REPORTING STANDARD- Governmental and Nonprofit Entities. New York:
Irwin/McGraw-Hill.
SETTING BODIES
Additional standard-setting bodies for the public sector
are: Jesse W. Hughes

356 ENCYCLOPEDIA OF BUSINESS AND FINANCE, SECOND EDITION