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GFOA Executive Board Refines Position on GASB Reassessment

The GFOA’s Executive Board voted in December 2006 to begin to work together with the other major state and local government organizations to reassess the GASB’s continued role as the authoritative accounting standard-setting body for state and local governments. It also undertook at that time to explore the possibility of transferring responsibility for setting accounting standards for state and local governments from the GASB to the Financial Accounting Standards Board (FASB), which historically has set generally accepted accounting principles (GAAP) in the United States for businesses and nonprofit organizations.

Recently, the Securities and Exchange Commission (SEC) approved a proposal to allow foreign companies to use international accounting standards without having to reconcile their financial statements to U.S. GAAP. Furthermore, it is widely anticipated that U.S. corporations will likely be given the option of selecting international standards as an alternative to U.S. GAAP. In light of these developments, many are raising serious questions about the FASB’s future as a standard-setting body.

The GFOA remains committed to ensuring that state and local governments have the benefit of accounting and financial reporting standards of the highest quality set by a nationally recognized and independent standard-setting body.  The GFOA also continues to believe that a reassessment of the GASB’s role is needed. However, in view of the uncertainty that now surrounds the FASB’s future, the GFOA’s Executive Board decided at its February 2008 meeting that the GFOA will no longer call for the FASB to assume the GASB’s standard-setting role for state and local governments.

 

Learn more about GFOA’s position on the Governmental Accounting Standards Board (GASB)