Accounting Standards for the Public and Non-profit Organization in the USA

Jana Ištvánfyová,Ladislav Mejzlík

doi:10.18267/j.efaj.50

Abstract

Governmental accounting in the US has undergone significant changes and with it the complexities of preparing financial statements for governmental entities increased. The GASB, Governmental Accounting Standards Board establishes the rules for reporting financial information for non-profit and public entities. The most important objective of governmental accounting and financial reporting is accountability. The GAAP hierarchy for governments consists of four levels, each having a varied degree of authority.

Highlights

Governmental accounting is a specialized area that has undergone significant changes over the past few decades
Governmental accounting standards are established by the Governmental Accounting Standards Board (GASB)
Accepted accounting principles for governments were once a loosely defined set of guidelines followed by some governments and governmental entities, but have developed into highly specialized standards used in financial reporting by an increasing number of these entities

Summary

Introduction

Governmental accounting is a specialized area that has undergone significant changes over the past few decades. Providing meaningful financial information to a wide range of users is not an easy task Adding to these challenges, the Governmental Accounting Standards Board (GASB) recently introduced sweeping changes to the governmental financial reporting model. Accepted accounting principles for governments were once a loosely defined set of guidelines followed by some governments and governmental entities, but have developed into highly specialized standards used in financial reporting by an increasing number of these entities. Because of this standardization, users are able to place additional reliance on these entities’ financial statements. Governmental financial statement preparers, auditors, and users must have a complete understanding of these requirements to fulfill their financial reporting obligations

Entities covered by governmental accounting principles

Objectives of governmental accounting and financial reporting

Objectives of Financial Reporting

Hierarchy of governmental accounting standards

Conclusion