The article will compare the objectives and differences between two standards boards, namely the Government Accounting Standards Board (GASB) and the Financial Accounting Standards Board (FASB). It will also examine the contrast between modified accrual basis of accounting and full accrual accounting. GASB oversees reporting and financial accounting standards for local and state government entities while FASB does the same for private-sector entities. Despite their distinct domains, both boards share a mutual appointment process with members chosen by Financial Accounting Foundation. Although the role of GASB relies heavily on the Financial Accounting Foundation, which provides general assistance and raises funds, they coordinate with the Government Accounting Standards Advisory Council. Consequently, both standards boards play a considerable role in governmental accounting standards and reporting regulations. In government situations governed by GASB rules, FASB standar
...d would apply if no GASB rule were specifically assigned. Presently, Financial Accounting Foundation suggests that government entities follow FASB rules only when GASB requires them to do so.FASB standards apply in government environments with special entities, which can be either owned by the government or the private sector. When special entities are government-owned, they are governed by GASB, whereas privately owned special entities are governed by FASB. However, according to current rules, GASB should consider that private sector special entities have financial statements prepared following FASB standards when comparing financial statements of privately owned and state-owned special entities. Despite being in a government environment, private entities remain governed by FASB. The goal of GASB is to establish and enhance standards for local and state government financial accounting, as well as to improve their ability to exhibit performance to the public, provide public
accountability, guide report users, and offer relevant information. In contrast, FASBs objective is to set accounting standards for public companies in the US.The goals of the organization are to enhance the importance and dependability, uniformity and coherence, and harmonization and excellence of monetary reporting. Additionally, the organization aims to maintain present standards, address deficient areas in financial reporting, and enhance comprehension of financial report data. Government regulation is significant in applying accounting standards and reporting obligations. The GASB and FASB boards are appointed by the Financial Accounting Foundation, which also raises funds and supervises activities. Despite its appointment of members, the Financial Accounting Foundation does not directly engage in standards-setting activities.
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