What Is the Government Accounting Standards Board (GASB)?
The Government Accounting Standards Board (GASB) is a private non-governmental organization that creates accounting reporting standards, or generally accepted accounting principles (GAAP), for state and local governments in the United States.
- The Government Accounting Standards Board (GASB) is a private non-governmental organization that creates accounting reporting standards for state and local governments.
- The GASB is responsible for the 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, non-political organization founded in 1984. The board's mission is to promote clear, consistent, transparent, and comparable financial reporting for state and local governments—the Federal Accounting Standards Advisory Board (FASB) does the same for the federal government. Taxpayers, holders of municipal bonds, legislators, and oversight bodies rely on this financial information to shape public policy and invest.
The Government Accounting Standards Board's (GASB) Functions
The GASB’s uses an open and independent process that encourages broad participation from all stakeholders and objectively considers and analyzes all their views. For example, in January 2018, GASB issued an Invitation to Comment for public feedback on the development of a comprehensive revenue and expense recognition model for state and local governments.
Oversight and Funding
The GASB is led by a board. There are seven members of the board, which is headed by a chair and a vice-chair. The FAF Board of Trustees appoints board members for five-year terms, and members serve for up to 10 years. The chair serves on the board full-time, while the vice-chair and the remaining five members serve the board on a part-time basis. GASB members are qualified in governmental accounting and finance and are concerned with public interests in the nation's accounting and financial reporting.
The GASB is subject to oversight by the Financial Accounting Foundation (FAF) Board of Trustees, which selects its board members, and the FASB, both of which it funds. In turn, the GASB is funded primarily by accounting support fees paid by brokers and dealers who trade in municipal bonds. This funding mechanism was established by Section 978(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.
The GASB's Mission
According to the GASB's website, "The collective mission of the GASB, the FASB, and the FAF is to establish and improve financial accounting and reporting standards to provide useful information to investors and other users of financial reports and educate stakeholders on how to most effectively understand and implement those standards." In that regard, the GASB relies on a variety of intelligence sources when settling its policies.
To ensure that diverse opinions are considered, the GASB convenes consultative groups and task forces. Consultative groups perform research for agenda items concerning accounting and financial reporting standards. Task forces are formed to conduct the board's technical projects.
Both groups are important sounding boards to ensure that the GASB makes the best decisions for the tax payer, finance, and business communities.