What are government financial statements used for and how is it different from for-profit financial statements?
The primary differences related to for profit and governmental financial reporting, are that for-profit financial statements are primarily used to provide investors and creditors with sufficient information to make business decisions. Whereas the primary reporting objectives for governmental organizations will be sustain accountability. Essentially, this indicates that citizens of a government have right to know how a government uses its resources.
Financial reports for governmental entities will primarily be used to:
1) Compare actual results with budgets
2) Assist in determining compliance issues
3) Assist in evaluating efficiency and effectiveness
4) Assess financial conditions and results of operations
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You might also be interested in... What are the key financial statement items in government financial statements under GASB?
Government financial statements use different terms than what you would see in financial statements for companies that follow U.S. GAAP. The key financial statement terms under GASB are assets, liabilities, outflow of resources, inflow of resources, deferred outflow of resources, deferred inflow of resources, and net position. Explanations for each item is below:
What are the main professional standard setting bodies for accounting and financial statements?
If the entity is for profit or a non-for-profit, then the Financial Accounting Standards Board (FASB) determines the rules. If the entity is governmental, then the Government Accounting Standards Board (GASB) determines the rules.
What are the financial reporting characteristics according to GASB?
Similar to qualitative characteristics reported under U.S. GAAP, government entities will report characteristics that are qualitative in nature under the Government Accounting Standards Board (GASB) principles. These characteristics include:
What are the key financial statement items in government financial statements under GASB?
Government financial statements use different terms than what you would see in financial statements for companies that follow U.S. GAAP. The key financial statement terms under GASB are assets, liabilities, outflow of resources, inflow of resources, deferred outflow of resources, deferred inflow of resources, and net position. Explanations for each item is below:
What are the main professional standard setting bodies for accounting and financial statements?
If the entity is for profit or a non-for-profit, then the Financial Accounting Standards Board (FASB) determines the rules. If the entity is governmental, then the Government Accounting Standards Board (GASB) determines the rules.
What are the financial reporting characteristics according to GASB?
Similar to qualitative characteristics reported under U.S. GAAP, government entities will report characteristics that are qualitative in nature under the Government Accounting Standards Board (GASB) principles. These characteristics include:
