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GASB proposes two-category approach for GAAP hierarchy

  • GASB (Governmental Accounting Standards Board) (blue) Image

Mar 03, 2014

The GASB has issued an exposure draft proposing to reduce from four to two the number of categories in the hierarchy of authoritative generally accepted accounting principles (GAAP) used by state and local governments to prepare financial statements.

Under the proposal, all GASB accounting standards would be in “category (a),” while all GASB technical bulletins, implementation guides, and guidance by the AICPA that is cleared by the GASB would be in “category (b).”

According to the GASB, the proposed changes would “improve financial reporting for governments by clearly identifying the appropriate accounting guidance to apply. The proposal also would improve implementation guidance by elevating its authoritative status and, therefore, requiring that all implementation guidance be exposed for public comment.”

Along with the exposure draft, the GASB issued a proposed implementation guide that is a culmination of all its implementation guides to date. As a result of the Board’s proposal to elevate implementation guidance to category (b) in the GAAP hierarchy, the proposed guide will be exposed for public comment.

The comment deadline for both documents is December 31, 2014.

For more information, see (links to the GASB’s Web site):

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.