Governmental Accounting Standards Board (GASB)

Definition

The Governmental Accounting Standards Board (GASB) establishes accounting and financial reporting standards for U.S. state and local governments. These standards aim to ensure transparency, consistency, and comparability in governmental financial statements.

5 Must Know Facts For Your Next Test

1. GASB was established in 1984 to improve government accounting and reporting standards.
2. GASB standards are crucial for the accrual accounting process in government entities.
3. Statement No. 34 is one of GASB's most significant pronouncements, requiring comprehensive annual financial reports (CAFR).
4. GASB standards ensure that financial information is available for public accountability and decision-making purposes.
5. The Financial Accounting Foundation (FAF) oversees GASB.

Review Questions

• What year was the Governmental Accounting Standards Board (GASB) established?
• Why are GASB standards important for the accrual accounting process in government entities?
• What is Statement No. 34, and why is it significant?

Related terms

Accrual Accounting:

An accounting method that records revenues and expenses when they are incurred, regardless of when cash transactions occur.

Financial Accounting Foundation (FAF): An independent organization responsible for overseeing the activities of both GASB and FASB.

Comprehensive Annual Financial Report (CAFR): A set of U.S. government financial statements comprising the financial report of a state, municipal or other governmental entity that complies with the accounting requirements promulgated by GASB.