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Business and Policy Areas
Business and Policy Areas

GASB Codification Proposal Consolidates Relevant Literature

January 7, 2010

A Governmental Accounting Standards Board's (GASB) Exposure Draft, "Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements," would reduce the need to rely on sources outside of the GASB's literature to locate accounting guidance for the governmental environment.

At present, preparers, auditors, and users of state and local government financial statements have to refer to the literature of multiple organizations to locate the relevant accounting and financial reporting standards. They have to look not just to the GASB - the recognized setter of generally accepted accounting principles (GAAP) for state and local governments - but also to the Financial Accounting Standards Board (FASB) and the American Institute of Certified Public Accountants (AICPA).

The proposal would bring the top category of authoritative accounting and financial reporting literature (referred to as "level a" literature) together in a single publication. The guidance contained in the exposure draft (ED) generally has been unchanged from the original FASB and AICPA pronouncements, though the guidance has been modified where necessary to relate specifically to the governmental environment. This document is not intended to establish any new accounting guidance.

The November 30, 1989 date is significant because that is the date of the jurisdiction determination, in which the trustees of the Financial Accounting Foundation reaffirmed the GASB's status as the standards setter for all state and local governmental entities. The GASB's objective is to specifically identify the applicable provisions in FASB and AICPA pronouncements and incorporate them into the GASB's literature. The GASB examined the following pronouncements issued before November 30, 1989 as part of that effort: 

  • FASB Statements and Interpretations
  • Accounting Principles Board Opinions
  • Accounting Research Bulletins of the AICPA's Committee on Accounting Procedure.

The ED addresses more than 120 FASB and AICPA pronouncements that date back several decades and cover some 29 accounting and financial reporting topic areas.  Because financial statement preparers and auditors would no longer have to search through various sources to determine which pronouncements apply to state and local governments, identifying the applicable guidance should be a much less daunting task.

NACUBO encourages public institutions to review the ED and provide comments to GASB, or to NACUBO for inclusion in the industry comment, by the July 31, 2010 deadline. The ED is available on the GASB website.


Sue Menditto
Director, Accounting Policy