What is the Government Accounting Standards Board (GASB)?
The Government Accounting Standards Board (GASB) is a private organization non-governmental organization that creates accounting reporting standards, or generally accepted accounting principles (GAAP)for state and local governments in the United States.
Key points to remember:
- The Government Accounting Standards Board (GASB) is a private, nongovernmental organization that creates accounting reporting standards for state and local governments.
- The GASB is responsible for generally accepted accounting principles (GAAP).
- The board’s mission is to promote clear, consistent, transparent and comparable financial reporting.
Understanding the Government Accounting Standards Board (GASB)
The Government Accounting Standards Board is an independent, nonpartisan organization founded in 1984. The board’s mission is to promote clear, consistent, transparent, and comparable financial reporting for state and local governments. Federal Accounting Standards Board (FASB) does the same for the federal government. Taxpayers, holders of municipal bondslegislators and oversight bodies rely on this financial information to shape public policy and invest.
Functions of the Government Accounting Standards Board (GASB)
The GASB uses an open and independent process that encourages broad participation from all stakeholders and objectively considers and analyzes all of their views. For example, in June 2022, the GASB issued an Invitation to Comment for public comment regarding providing users of government financial statements with critical information about risk vulnerabilities and disclosure for state and local governments.
Monitoring and funding
The GASB is governed by a board of directors. There are seven members of the Board of Directors, which is headed by a President and a Vice President. The FAF Board of Directors appoints Board members for five-year terms and members serve for up to 10 years. The president sits on the board full-time, while the vice-president and the other five members sit on the board part-time. GASB members are qualified in government accounting and finance and are concerned with the public interests in the country’s accounting and financial reporting.
The GASB is subject to the control of the Financial Accounting Foundation (FAF) Board of Trustees, which selects its board members, and the FASB, which it funds. In turn, the GASB is funded primarily by accounting support fees paid by brokers and brokers who trade municipal bonds. This funding mechanism was established by Article 978 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.
The mission of the GASB
According to the GASB website, “The collective mission of the GASB, FASB and FAF is to establish and improve financial accounting and reporting standards in order to provide useful information to investors and other users of financial reports. and to educate stakeholders on how to most effectively understand and implement these standards.” In this regard, the GASB relies on a variety of intelligence sources to establish its policies.
To ensure that diverse opinions are taken into account, the GASB convenes advisory groups and working groups. Advisory groups research agenda items related to accounting and financial reporting standards. Working groups are formed to conduct the council’s technical projects. Both groups are important sounding boards to ensure the GASB makes the best decisions for the ratepayers, finance and business communities.