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Glossary/Government, nonprofit and ERISA

GASB (Governmental Accounting Standards Board)

The Governmental Accounting Standards Board sets accounting and financial reporting standards for US state and local governments, which auditors of governmental entities apply as GAAP alongside the GAAS or GAGAS audit requirements.

CORAA TeamUpdated November 5, 2026

Definition

The Governmental Accounting Standards Board (GASB) is the independent body that establishes GAAP for state and local governments, including cities, counties, school districts, and public pension plans. It issues Statements and Implementation Guides. Like the FASB, it is overseen by the Financial Accounting Foundation. Governmental entities follow GASB standards and the GASB GAAP hierarchy (Statement 76), not FASB standards. Whether an entity is governmental is determined under the definition used in AICPA and GASB guidance.

Why it matters in an audit or review

A government auditor tests compliance with GASB Statements such as Statement 34 on the financial reporting model, Statement 68 on pension accounting, and Statement 87 on leases. The GAAP hierarchy for governments differs from the FASB hierarchy. Mistaking the framework leads to the wrong opinion basis, wrong disclosures, and wrong fund-level presentation.

Example

Illustrative: a county's audit uses a GASB lease model for a copier contract. The auditor evaluates whether the county recognized a lease liability and an intangible right-to-use asset as GASB 87 requires.

Common mistakes

Applying FASB guidance to a government without checking the GASB hierarchy.

FAQ

Does GASB cover nonprofits?

Not typically. Most nonprofits use FASB. Public colleges and universities that are governmental follow GASB.

Sources

  • GASB, Statement No. 34, No. 68, No. 76 and No. 87
  • Financial Accounting Foundation, oversight of the GASB and FASB

Definitions paraphrase AICPA and FASB guidance; read the standard itself before relying on a requirement. Example figures are illustrative. This page is guidance, not professional advice. Report an error

Related terms

  • Governmental audit
    A governmental audit examines the financial statements of a state or local government under GAAS and, usually, GAGAS, using GASB standards and a reporting model with opinion units for each fund type and major fund.
  • GASB Statement No. 34
    GASB Statement 34 created the modern financial reporting model for state and local governments, adding government-wide statements, fund statements, management's discussion and analysis, and required supplementary information.
  • GASB Statement No. 87 (leases)
    GASB Statement 87 requires governments to treat most leases as financings of the right to use an underlying asset, recognizing a lease liability and an intangible asset for lessees and a lease receivable for lessors.
  • FASB (Financial Accounting Standards Board)
    The Financial Accounting Standards Board is the independent private-sector body that sets US GAAP for businesses and nonprofits, publishing its standards in the Accounting Standards Codification.

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