Government Accounting Standards Board versus Financial...

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†¦show more content†¦The mission of the FASB is to â€Å"establish and improve standards of financial accounting and reporting that foster financial reporting by nongovernmental entities that provides decision useful information to investors and othe r users of financial reports (FASB 2014).† The FASB is also an independent organization that is different from any other business and professional organization. The FASB has seven members, and they serve full time. They are appointed for five year terms, and are eligible for an additional five year term. The FASB uses due process to implement the process of the standard setting process. The rules for setting or changing standards include; identifying financial reporting issues from stakeholders or other sources, and then the FASB decides whether or not to add the issue to the agenda. Once that is done the boards deliberates at one or more public meetings, and an Exposure Draft is issued for stakeholder input. The FASB staff then analyzes letters, discussions, and any other information received which the Board will redeliberate on the proposed provision at one or more public meeting, and then the Board will issue the standard update. The FASB uses what is called a cost benefit analysis which is a process for calculating and comparing the benefit cost to the proposed policy (FASB, 2014). The GASB and FASB have quit a few similarities. They both aimShow MoreRelatedEssay Explaining Basic Accounting Concepts and Business Structures754 Words   |  4 PagesExplaining Basic Accounting Concepts and Business Structures To understand accounting there are several key concepts and terms to be familiar with. One must know where Generally Accepted Accounting Principles came from as well as how businesses form. 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