Pub. 2 2020 Issue 1

J A N U A R Y / F E B R U A R Y 2 0 2 0 16 nebraska cpas GASB UPDATES: HOW FAR BACK SHOULD ONE GO? While a GASB update for some may mean needing to go back just a year, for others it may mean needing to go all the way back to the beginning. BY PAUL H. KOEHLER, CPA The beginning for the Governmental Accounting Standards Board (GASB) was 1984. GASB’s seven-member board issues pronouncements that constitute Generally Accepted Accounting Principles (GAAP) for state and local government general-purpose external financial reports in the United States. In an effort to improve understanding and communication and ultimately better serve the public interest, this article will start at the beginning, highlight some common GAAP misstatements, and enable one to better appreciate more current GAAP issues. What Do the Letters Mean? Here’s what GASB means to me. • “G” stands for Governmental ; itmeans “pertaining to state and local governments, both general purpose and special purpose, in the U.S.” (not the federal government). • “A” stands for Accounting ; it means “reporting.” Look at any recently issuedGASB statement, and youwill see an applicability box that refers to “reports,” and the effective date of a statement refers to “reporting periods.” • “S” stands for Standards ; it means “principles,” the same as the “P” in GAAP. Please notice that this last letter is not a “G” for “guidance”; it appears in neither the acronym nor in GASB 76. I believe it is in the public interest, and thus in one’s interest, to cease using the recently ubiquitous term “guidance” when referring to authoritativeGAAP. Principles are requirements, as that term is used in GASB statements, and financial statement readers have a reasonable expectation they be followed if material. (Remember the “materiality box” that appears in GASB statements.) • “B,” of course, stands for and means the seven-member Board . Should GASB Change to GRPB? Probably not. Well-established names and acronyms normally don’t change and probably shouldn’t. For example, the Big Ten Conference includes Nebraska and 13 other teams—it’s not going