Discussions W1-3 - Assignment Example

This include: independence, integrity, objectivity and being transparent. The body hopes that its independence from undue pressure will not have an influence in its decision-making processes. The board has to be ethical, honest and forthright in all its relationships. It also has to be impartial in its decisions so that it can encourage open public participation. FASB on the other hand, is responsible for improving the financial accounting and reporting by non-governmental agencies. The boards has to ensure that such institutions provide financial information that is accurate and useful to investors and other end users.

The board encourages broad participation of all stakeholders view in an effort to come up with better financial reporting standards. There are some differences in accounting for profits and nonprofit financial reporting. The standards of reporting for the two accounting boards are very different especially when it comes to accounting for profit. In recognition of profits for instance, GABS does not necessarily recognize profits because it is a non-profit making venture and instead it may be called surplus.

FASB on the other hand, does recognize profits in its financial reporting and is one of the most important information for decision makers. Therefore, profit is always recognized and has to be reported in the financial statements of profit making institutions. Government reporting is often a challenge especially when one has to consider that the government has to take into consideration different aspects. For instance, government reporting is different for counties and that of the city because of different reasons.

First, the counties are usually under the local authorities and the cities are usually under a municipality and thus the difference. The reporting also has to take into consideration the number of residents or the population of the inhabitants. This is especially crucial in knowing what the resources will be allocated to each county and city. As is the case, some counties are larger than cities and some cities are bigger than counties. Therefore, there has to be some consistency in reporting of financial statements for the two.

GABS reporting on financial statements of non-profit making institutions has to take into consideration three main characteristics. First, the information shared has to be useful to the end users. The main use of information is to influence decision-making, therefore the information has to be useful to people who are not looking for profits but rather how resources or services have been provided effectively. Secondly, GABS has to take into consideration the fact that most users are not familiar with accounting standards for governmental organizations.

Therefore, the board has to educate and guide the end users in interpreting financial reporting for non-profit organizations. Finally, the decision makers are the most important and integral part of reporting. The government should not alter any information on financial statements to influence the minds of the decision makers (gasb.org, 2012). There are similarities and contrasts in the way financial reporting is conducted under the International financial reporting standards and the U.S GAAP especially when it comes to leases.

Both accounting reporting are similar in that they recognize the three types of leases. They recognize the existence of a capital lease, a financial lease and an operating lease. Secondly, the two