Governmental Accounting Standards Board and Financial Accounting Standards Board - Research Paper Example

Financial Accounting Standards Board, called FASB in short is the independent, private and non-governmental group, which has to its authority the role of accounting profession and professionals to undergo the establishment of a generally accepted set of accounting principles in the United States.

GASB has the duty to establish financial reporting standards for both the state as well as the local governments which might include within their states, cities, towns, villages and special-purpose governments such as school districts and not to forget the public utilities and service centers. GASB also plays a pivotal role in establishing the fundamental financial statements, which are required supplementary information (RSI) for governments that can be termed as general purpose. RSI is created so as to make evident that whether or not resources are achieved and brought about as well as used in the compliance of the government's legally prevalent budget. It should embody budgetary comparison schedules for the funds that are deemed general and the same should be legally adopted by the annual budget for each significant and special revenue fund (Hurtt 2008).

The FASB has provided new cartridges for its derogators of late. It has been seen by the government legislators that the adoption of the ill-planned FASB Statements has been delayed a number of times which in essence ended up in a gap of five years where there was no comparison whatsoever with the financial statements. It is seen that the communal expression of complaints about the FASB basically center on the "Standards Overload;" in which case, the FASB has been pretty hectic in delivering a number of them over the years. More often than not, these are elaborate and compound declarations.

Both GASB and FASB work in close harmony with each other whereby each of these boards has the role of playing as an institution that establishes how and when financial reporting standards are drafted and put forward for their constitution. GASB in particular has the unique and set role of establishing the essential financial statements that are in addition to the required supplementary information (RSI) which are made for general-purpose governments (Riper 1994). On the other hand, the mission of FASB is to constitute as well as improve standards of financial accounting in addition to the reporting for the guidance and education of the public which might entail issuers, auditors and not to forget the users of financial information.

 FASAC (Financial Accounting Standards Advisory Council) has the trustworthiness to consult with the FASB on the technical issues which are there on the Board’s agenda, project priorities and the matters that are most likely to require the board’s application. The modified accrual basis is identified in a clear-cut manner when one compares the same with the full accrual accounting regimes.

Certain advisory councils have also been set up which carry out the required activities under the auspices of the respective boards, one such being the Financial Accounting Standards Advisory Council (FASAC) running under the umbrella of FASB (Bryan 1997). 

For these trustees, a board is set up which looks for their benefits as well as grievances from time to time. These are for the sake of the FASB board, which has its role in playing a neutral between the Government and the financial accounting policies and the like.