Governmental accounting: the current and proposed governmental accounting models: a comparison

Article Abstract:

The Governmental Accounting Standards Board in August 1989 published an exposure draft identifying the concept of measuring interperiod equity as a financial reporting objective for public bodies, and proposed an accounting model to achieve that end. The areas affected by the proposed accounting model include revenues, expenditures, and debt. The proposed model acknowledges any revenue that is measurable and available and identifies nonexchange revenue, such as taxes, fines, and fees, as well as exchange revenues, such as user fees, investment income, and gains from the sale of investments. Under the current model, only the flow of expendable financial resources are measured, while the proposed model defines expenditures as decreases in financial resources from certain transactions. The current model reflects debt only if it consumes resources, while the new model segregates debt on the basis of its purpose.

Standards, Accounting and auditing, Public finance, Government accounting, Governmental Accounting Standards Board

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Deferred income taxes: a financial windfall?

Article Abstract:

The adoption of the Statement on Financial Accounting Standard (SFAS) No. 96 of the Financial Accounting Standards Board (FASB) may take place in any fiscal year beginning after Dec 15, 1988. The change from the deferred method of the generally accepted accounting principles (GAAP) to the liability method of SFAS No. 96 may produce a significant numerical anomaly. Net income will be difficult to evaluate because SFAS No. 96 permits the transition adjustment to be shown either as a cumulative effect in net income or as an adjustment to retained earnings.

Liabilities (Accounting), Taxation, Financial Accounting Standards Board, Deferred compensation

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