Academic journal article Journal of Accountancy

GASB Issues Guidance on the Use of Not-for-Profit Accounting

Academic journal article Journal of Accountancy

GASB Issues Guidance on the Use of Not-for-Profit Accounting

Article excerpt

The Governmental Accounting Standards Board has issued guidance on the use of not-for-profit accounting principles by state and local governments. Some government entities use not-for-profit standards and others follow new Financial Accounting Standards Board standards. GASB Statement no. 29, The Use of Not-for-profit Accounting and Financial Reporting Principles by Governmental Entities (see page 110), allows certain governments to use not-for-profit accounting principles but not the new not-for-profit standards issued by the FASB.

George A. Scott, partner of Deloitte & Touche in Fort Worth, Texas, told the journal that it appeared government entities might have a choice between FASB Statements no. 116, Accounting for Contributions Received and Contributions Made, and no. 117, Financial Statements of Not-for-profit Organizations. "That door has been shut by GASB Statement no. 29," said Scott.

Where lies the confusion?

GASB Statement no. 29 says questions about the applicability of FASB Statement nos. 116 and 117 arose when some entities, especially those incorporated under section 501 of the Internal Revenue Code, identified their status as governmental and recently began asking the GASB for guidance. Also, some entities that are identified as governments follow not-for-profit principles because their activities fall within the scope of American Institute of CPAs Statement of Position 78-10, Accounting Principles and Reporting Practices for Certain Nonprofit Organizations, or the AICPA industry audit guide Audits of Voluntary Health and Welfare Organizations. …

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