Tuesday, February 11, 2020
GASB and FASB Accounting Essay Example | Topics and Well Written Essays - 750 words
GASB and FASB Accounting - Essay Example Whereas FASB has the objective to establish and improve standards for financial accounting and reporting that will help in guiding and educating public including auditors and other users of financial statements. Ã GASB was constituted in 1984 to succeed National Council on Government Accounting as a standard-setting body for state and local governmental bodies, whereas FASB issues standards and other pronouncements for entities other than governmental bodies. However, when there are no pronouncements on certain issues from GASB, the pronouncements issued by the FASB shall become applicable to governmental bodies as well. So far as business organizations are concerned, they have to abide by the standards issued by FASB. Non- business organizations, non- government organizations follow FASB and the government organizations come under the domain of GASB. Ã GASB is very specific to state legislature while issuing pronouncements. FASB, on the other hand, issues pronouncements that are universal and cater the business on a federal basis. In fact Ã¢â¬Å"FASB receives many requests for action on various financial accounting and reporting topics from all segments of its diverse constituency, including investors and the SEC. The auditing profession is sensitive to emerging trends in practice, and consequently, it is a frequent source of requests. Requests for actions include both new topics and suggested review or reconsideration of existing pronouncement.Ã¢â¬ (Facts about FASB, page 1) Ã It is believed that governments need not show profits like other financial entities.