Gasb and Fasb Analysis

Running Title: GASB and FASB Analysis

GASB and FASB Analysis

GASB and FASB Analysis

This essay will explain the objective the Governmental Accounting Standard Board (GASB) and Financial Accounting Standard Board (FASB) while comparing and contrast the similarities and differences between the two boards. Another area that will be discuses is the difference between modified accrual basis and full accrual basis.

The objective of GASB is to create and improve the financial reporting and accounting for state and local government while ensuring to improve and educate the user, auditor, and the public. The objective of FASB is to establish and improve financial reporting and accounting for all non-governmental and non-for-profit companies while ensuring to educate the user, auditor, and the public.

The differences between GASB and FASB are as stated by Engstorm, (2010), “unrestricted cash gifts, purpose restricted cash gifts, pledges, or promises to give, permanent endowments, split-interest agreements, including term endowments, unrestricted funds functioning as endowments, contributions of plant and assets restricted to acquisition of plant, and "collections" (p. 3).

“GASB and FASB using the cash flow statement which shows the inflow and outflow of cash as it relate to the companies operating, financing, and investing activities” (Wilson, 2000, slide. 10).

“Another similarities is they both define cash and cash equivalents as being time deposits, marketable securities, and other items readily convertible to cash” (Wilson, 2010, ppp, 10). Another are to be discuses is modified and full accrual basis.

The modified accrual basis combines both the cash and accrual method together. “Modified accrual accounting recognizes revenues when they become available and measurable and, with a few exceptions, recognizes expenditures when liabilities are incurred” Whereas under the full...