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Authoritative Source of Guidance
The most authoritative source of generally accepted accounting principles (GAAP) developed by FASAB for federal entities is contained in The FASAB Handbook of Accounting Standards and Other Pronouncements, As Amended (FASAB Handbook).
Please refer to the FASAB Handbook for FASAB accounting standards and other pronouncements within the GAAP hierarchy (inset right) before referring to other sources of information.
Note: Versions prior to June 30, 2011, were referred to as Pronouncements as Amended, Statements of Federal Financial Accounting Concepts and Standards (2008–2010), Original Pronouncements, Statements of Federal Financial Accounting Concepts and Standards (2007), or Volume 1, Original Pronouncements, Statements of Federal Financial Accounting Concepts and Standards (2004 and 2006).
The FASAB Handbook is updated annually to incorporate all accounting standards and other pronouncements issued through June 30 of each year.
Current FASAB Handbook
The most recent version is referred to as the “Current FASAB Handbook” and should be used when the most current and up-to-date guidance is desired. New accounting standards and other pronouncements that are issued after June 30 of each year are listed along with the current version until they are incorporated into the next update.
Archived FASAB Handbooks
Once the annual update is issued, the prior version is replaced with the new current version. Beginning with the June 30, 2004, version, all prior versions are then archived for reference purposes. These archived versions are available online to provide a historical record of the accounting standards and other pronouncements that were in place as of June 30 of each year. It may be desirable to reference an archived version to support a prior audit or determine what the accounting and financial reporting requirements were for any given year. In versions prior to 2008, amendments were not presented in each pronouncement.
The term generally accepted accounting principles (GAAP) has a specific meaning for accountants and auditors. The American Institute of Certified Public Accountants (AICPA) Code of Professional Conduct prohibits members from expressing an opinion or stating affirmatively that financial statements or other financial data “present fairly…in conformity with generally accepted accounting principles,” if such information contains any departures from accounting principles promulgated by a body designated by the AICPA Council to establish such principles.
In October 1999, the AICPA Council designated FASAB as the body that establishes GAAP for federal reporting entities. As such, the FASAB is responsible for identifying the “GAAP hierarchy” for federal reporting entities (inset right). The GAAP hierarchy consists of the sources of accounting principles used in the preparation of financial statements of federal reporting entities that are presented in conformity with GAAP and the framework for selecting those principles. The hierarchy lists the priority sequence of sources that an entity should look to for accounting and reporting guidance and is discussed in Statement of Federal Financial Accounting Standards (SFFAS) 34, The Hierarchy of Generally Accepted Accounting Principles for Federal Entities, Including the Application of Standards Issued by the Financial Accounting Standards Board.
The hierarchy of generally accepted accounting principles (GAAP hierarchy) governs what constitutes GAAP for federal reporting entities. It lists the priority sequence of pronouncements that a federal reporting entity should look to for accounting and financial reporting authoritative guidance. The sources of accounting principles that are generally accepted are categorized in descending order of authority as follows:
- a. Officially established accounting principles consist of FASAB Statements of Federal Financial Accounting Standards (Standards) and Interpretations. FASAB Standards and Interpretations will be periodically incorporated in a publication by the FASAB.
- b. FASAB Technical Bulletins and, if specifically made applicable to federal reporting entities by the AICPA and cleared [FN deleted] by the FASAB, AICPA Industry Audit and Accounting Guides. [FN deleted]
- c. Technical Releases of the Accounting and Auditing Policy Committee of the FASAB.
- d. Implementation guides published by the FASAB staff, as well as practices that are widely recognized and prevalent in the federal government.
Source: SFFAS 34, par. 5;
2010 Pronouncements, As Amended, Statements of Federal Financial Accounting Concepts and Standards; pp. 1340-1341