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Business and Policy Areas
Business and Policy Areas

GASB Proposes Elevating Implementation Guide

May 2, 2014

The Governmental Accounting Standards Board (GASB) issued an Exposure Draft, "The Hierarchy of Generally Accepted Accounting Principles for State and Local Governments," that would reduce the GAAP hierarchy from four categories to two. The hierarchy of Generally Accepted Accounting Principles (GAAP) comprises guidance that state and local governments in the United States follow when preparing financial statements. The first category (level a) would be GASB's accounting standards and the second (level b) would be Technical Bulletins, Implementation Guides and AICPA guidance cleared by the board.

GASB also issued an accompanying proposed implementation guide, "Implementation Guide No. 20xx-1," (Proposed Guide) which combines all implementation guidance to date. Due to major proposed changes in the authoritative level of implementation guidance, the Exposure Draft and proposed implementation guide will be exposed for public comment through December 31, 2014. Additionally, the Proposed Guide that accompanies the Exposure Draft contains certain changes from the existing Comprehensive Implementation Guide (CIG), which can be found in Appendix C.

GASB's first CIG was released in 2003. With the continuing release of GASB accounting standards, the initial CIG combined and eliminated various questions and answers from topical standalone implementation guides that GASB had been releasing since 1991. Since 2003 the staff and a committee composed of GASB constituents have been updating the CIG based on known ambiguities and constituent questions submitted for literature clarification. Although all new releases of the CIG are cleared by the board, lack of constituent due process has kept the CIG's level of authoritative significance in the GAAP Hierarchy to level d (the lowest of four authoritative levels in the GAAP hierarchy).

In April 2011, the addition of pre-agenda research activities related to a project to reexamine the GAAP hierarchy was approved and the project was added by the board to its current agenda in April 2012. The Exposure Draft and accompanying Proposed Guide reflect the board's belief that GASB Implementation Guides should be placed in category (b) of the GAAP hierarchy because they play a significant role in the governmental financial reporting environment and provide a mechanism through which to promote consistent application of GASB statements.


Sue Menditto
Director, Accounting Policy