Federal GAAP Hierarchy

For questions about this project, email gaaphierarchy@fasab.gov.

Project Objective

SFFAS 34, The Hierarchy of Generally Accepted Accounting Principles for Federal Entities, Including the Application of Standards Issued by the Financial Accounting Standards Board, incorporated the hierarchy of GAAP into FASAB’s authoritative literature. SFFAS 34 generally carried forward the hierarchy as set forth in Statement of Auditing Standards 91, Federal GAAP Hierarchy. SFFAS 34 provides the sources of accounting principles and the framework for selecting the principles used in the preparation of general purpose financial reports of federal entities that conform with GAAP.

As part of FASAB’s overall reexamination of existing standards, the Board will consider ways to improve, simplify, clarify, and streamline the federal GAAP hierarchy to ensure it is effective.

FASAB GAAP Hierarchy Working Group

FASAB formed a working group to assist the Board with the reexamination of the federal GAAP hierarchy project. The FASAB GAAP Hierarchy Working Group webpage provides further information on the working group objectives and activities, to include past meeting agendas, minutes, and other information.

History of Board Deliberations

December 16-17, 2025

At the December 2025 meeting, staff provided the Board with an update on the federal GAAP hierarchy working group activities. The working group’s approach was to define the basic characteristics of accounting guidance that should be included in the federal GAAP hierarchy and the common distinguishing characteristics of this accounting guidance.

The basic characteristics developed by the working group to assess accounting guidance for inclusion in the federal GAAP hierarchy are

• exposed for public comment and include the Board’s consideration of stakeholder comments,
• approved by the Board, and
• included in the FASAB Handbook.

The Board agreed with the first two basic characteristics for inclusion in the federal GAAP hierarchy. The Board decided to remove the “included in the FASAB Handbook” basic characteristic.

Guidance that meets the basic characteristics for inclusion in the hierarchy should then be assessed against the distinguishing characteristics of the highest-level GAAP and lower-level GAAP to determine placement. The distinguishing characteristics identified by the task force focus on the intended purpose of the guidance and whether a document is formally voted on and issued by the Board versus under the oversight of the Board.

Based on analysis of these distinguishing characteristics, Statements of Federal Financial Accounting Standards (SFFASs or Statements) and Interpretations would continue to be the highest level of GAAP. Technical Bulletins (TBs), Technical Releases (TRs), and Staff Implementation Guides (SIGs) would tentatively be a lower level in the hierarchy.

The Board discussed that TBs are uniquely challenging because they may be used to provide application guidance but may also address areas not directly covered by existing Statements or Interpretations. TBs are also constrained by specific guidelines established in TB 2000-1, Purpose and Scope of FASAB Technical Bulletins and Procedures for Issuance. TB 2000-1 provides guidelines for assessing whether an issue may be resolved through a TB. TB 2000-1 procedures provide for both due process (more limited in scope and within a tighter minimum time frame than Statements and Interpretations) and review but no affirmative vote by FASAB members.

Although TBs may provide guidance to address areas not directly covered by existing Statements or Interpretations, TB 2000-1 explains that a TB can provide guidance only when a problem can be resolved within certain guidelines.

The Board discussed that certain changes to the due process could naturally affect the timeliness of TBs and this may be inconsistent with the purpose of providing timely resolution in certain contexts that fall under the existing guidelines for use.

Based on staff’s assessment, AICPA Industry Audit and Accounting Guides made specifically applicable to federal reporting entities and cleared by the FASAB and practices widely recognized and prevalent in the federal government do not meet the basic characteristics for inclusion in the hierarchy; therefore, neither should continue to be included in the hierarchy. Statements of Federal Financial Accounting Concepts (SFFACs) would continue in other accounting literature, which is consistent with the current treatment. Along with SFFACs, the Board discussed moving AICPA Guides and practices widely recognized and prevalent to other accounting literature.

The Board appreciated the comprehensive analysis and assessment of each of the sources of accounting in the briefing materials. The Board generally agreed with the staff analysis and recommendations.

When assessing each of FASAB’s communication methods against the characteristics, the process identified overlapping purposes among certain communication methods that contribute to the complexity of the existing GAAP hierarchy.

The Board tentatively agreed with the recommendation to discontinue the use of SIGs and use TBs for time sensitive topics going forward. The working group will consider the most efficient manner to implement the discontinuation of SIGs and how the existing SIGs will be incorporated as part of the revised hierarchy that is developed. It was noted that FASAB staff is currently addressing implementation questions related to SFFAS 64, Management’s Discussion and Analysis: Rescinding and Replacing SFFAS 15, through a proposed SIG. The Board agreed that this project would continue as a SIG and then the forthcoming SIG could be handled in a manner consistent with the other existing SIGs.

FASAB staff will work with the working group on addressing the area of other accounting literature. This will include identifying an inventory of widely recognized and prevalent practices in the federal government that are critical today. It will also include expanding the discussion on other accounting literature to provide more context and explanation as to how it is used with the hierarchy. The working group will also consider ways to present the other accounting literature and if an order of precedence or tiers would be helpful.

Briefing Materials – Topic F

June 2025

Staff coordinated and established a FASAB GAAP hierarchy working group. The working group roster includes representatives from each of the sponsors, financial management chief financial officer community, audit community, and affiliated associations. The working group will hold a series of round table meetings to assist the Board as it considers ways to improve, simplify, clarify, and streamline the federal GAAP hierarchy to ensure it is effective. The first working group meeting was in June 2025. Considering it was the first meeting, the meeting primarily focused on background information and objectives of the project.

April 22, 2025

At the April Board meeting, the Board considered the project plan for the federal generally accepted accounting principles (GAAP) hierarchy project. FASAB added the project to the active project agenda as part of its reexamination of existing standards. SFFAS 34, The Hierarchy of Generally Accepted Accounting Principles, Including the Application of Standards Issued by the Financial Accounting Standards Board, was the third most requested reexamination topic. Stakeholders suggested the Board

• simplify the federal GAAP hierarchy so that it may be more practical,
• clarify “practices that are widely recognized and prevalent in the federal government” because it is vague and could allow for many interpretations, and
• clarify “other accounting literature” and how it fits into the GAAP hierarchy.

SFFAS 34 preserved the long-standing and common practices of all U.S. accounting standard-setting bodies at the time it was issued in 2009. Since then, the Financial Accounting Standards Board (FASB) and the Governmental Accounting Standards Board (GASB) have revisited their respective four-level GAAP hierarchies and each reduced the number of levels. They both also addressed the use of “authoritative” and “nonauthoritative” literature in the event that the accounting treatment for a transaction or other event is not specified within a source of authoritative GAAP.

Questions regarding clarifications of the federal GAAP are not new because they were brought up during the due process for SFFAS 34. This project is intended to resolve the longstanding questions, such as reexamining “practices that are widely recognized and prevalent in the federal government” to determine the intent. There is diversity in the views of preparers and auditors about which practices are part of the existing hierarchy.

Staff plans to form a small working group or round table to assist with the project. The working group was recommended over a task force because this approach would provide the most effective forum to discuss issues, alternatives, and recommendations while also ensuring that the participants possess the required expertise in this area.

Any changes to the GAAP hierarchy would result in the need to consider the effects of the proposed change. For example, a potential significant change may result in the need to assess and consider the status of existing guidance.

The Board unanimously supported and approved the federal GAAP hierarchy project plan.

Briefing Materials – Topic B

March 2025

The Board added this project to the current technical agenda at the August 2024 meeting. Staff is preparing a project plan for Board consideration and approval. Staff is also performing research for this important project. Staff anticipates presenting the project plan at the April 2025 Board meeting.