Acc461 Week 1 Individual Assignment

FASB/GASB Paper

By: Whitney Reeser

University of Phoenix

November 12, 2012

In the paper I will be discussing the Governmental Accounting Standards Board and the Financial Accounting Standards Board. I will also discuss how they are similar and different. Finally I will explain how the modified accrual basis of accounting differs from full accrual accounting.

The main purpose of the Governmental Accounting Standards Board is to establish and improve standards of state and local governmental accounting and financial reporting that will result in useful information for users of financial reports and guide and educate the public, including issuers, auditors, and users of those financial reports.

The main purpose of the Financial Accounting Standards Board is to establish and improve standards of financial accounting and reporting for the guidance and education of the public, including issuers, auditors, and users of financial information.

The similarities between GASB and FASB are:

* To be objective in its decision making and to ensure the neutrality of information resulting from its standards.

* To weigh carefully the views of its constituents in developing concepts and standards

* To promulgate standards only when the expected benefits exceed the perceived costs

* To bring about needed changes in ways that minimize disruption to the continuity of reporting practice

* To view the effects of past decisions and interpret, amend, or replace standards in a timely fashion when such action is indicated.

The main difference between the two is that the GASB is specific to individual state legislatures and the FASB is on a federal level, so their scope is much broader.

The Government Accounting Standards Board establishes modified accrual accounting standards. To distinguish government accounting from business accounting, modified accrual accounting uses some different terminology than other accounting methods. For example, it uses the terms...