A. Explain how to address compliance with Government Accounting Standards (GAS) in nonprofit and governmental financial...

A. Explain how to address compliance with Government Accounting Standards (GAS) in nonprofit and governmental financial statements. Support your response with academic source(s).

B. Explain how the analysis of nonprofit and governmental financial statements differs from analysis of traditional financial statements. Provide academic examples to support your response.

C. Compose example financial statements for your company as a nonprofit entity and as a governmental entity. Ensure all information is entered accurately and the statements are compliant with GAS.

Solutions

Expert Solution

A) Government Accounting Standards Board (GASB) is responsible for issuing guidelines and framework regarding preparation and presentation of financial statements for state or local government entity, and non-profit organisations. GASB is also based on the principles issued by Financial Accounting Standard Board (FASB) for financial reporting purpose. Statement No – 29 of GASB is used for Not-for-Profit organisation accounting and financial reporting principles for government entities.

B) Entities are using modified accrual accounting method in preparation and presentation of financial statements instead of traditional accrual method of accounting where governmental organisations can report integrated and expected cash flow of the organisation to ensure the more accurate and precise financial situation of the organisation. GASB is not based on GAAPs’ principles and Financial Reporting Framework (FRF) and Financial Accounting Standard Board (FASB). And all the differences between FASB and GASB reporting can be divided in four categories like recognition, measurement, display, and disclosure.

C) FASB requires disclosure of assets and liabilities in liquidity order and GASB requires disclosure of assets and liabilities into current and non-current classification. Therefore, the presentation of financial statement as per GASB is also different from FASB reporting requirement where financial statements are based on standards issued by board regarding financial reporting purpose.

ekkarill92 answered 1 month ago

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