Getting a Makeover: GASB Spruces Up a Quarter-Century Old Financial Reporting Model Without Disruptive Change

A little more than 25 years ago, in June 1999, the Governmental Accounting Standards Board (GASB) adopted GASB Statement No. 34, Basic Financial Statements—and Management’s Discussion and Analysis— for State and Local Governments (GASB 34), which profoundly changed financial reporting by U.S. state and local governments. The statement introduced a new financial reporting model, a paradigm in which government-wide financial statements were added to the traditional fund-level reports prepared by governments. In the government- wide statements, core governmental operations—those financed primarily by taxes and intergovernmental aid—were reported for the first time using an economic resources measurement focus and the accrual basis of accounting, similar to that used by governments’ business-type activities and the private sector accounting on which that was based.

While Governmental Accounting Standards Board (GASB) has augmented and amended the authoritative accounting literature (generally accepted accounting principles, or GAAP) for U.S. state and local governments many times since, that fundamental framework remains significantly unchanged a quarter century later.

On April 17, 2024, GASB voted to approve GASB Statement No. 103, Financial Reporting Model Improvements (GASB 103), which makes incremental rather than fundamental changes.

• Publication date: October 2024
• Author: Michele Mark Levine