The Federal Government, State and Local Governments (SLG), and Not-for-profit organizations (NFP) all have unique objectives and assets under their control. As a result it may not be feasible to develop a single set of accounting standards that accurately represents all of their financial activity in a manner that is useful to concerned parties. To resolve these discrepancies three separate standard setting bodies have been tasked with developing Generally Accepted Accounting Principles (GAAP) for these different organizations: The Federal Accounting Standards Advisory Board (FASAB) for federal accounting, the Governmental Accounting Standards Board (GASB) for SLG, and the Financial Accounting Standards Board (FASB) for NFPs. The different standards created by these organizations all achieve their goals with varying strengths and weaknesses.
Federal Government Accounting
FASAB faces many unique challenges when developing accounting standards for the federal government. The federal government's shear size, ability to manipulate the money supply, and complex issues such as accounting for social security all complicate the task of developing a single standard for representing the government's financial activity. In spite of these obstacles FASAB has managed to provide a standard requiring all agencies to provide similar reports, which can is then consolidated into an individual report. This allows the reader to analyze the whole as well as the contributions of the individual parts.
The greatest strength of FASAB, in my opinion, is its use of performance and accountability reports. These reports require federal organizations to provide logical outcome based metrics that measure the entities ability to achieve its desired effect on society rather than ...