Join the waitlist
Glossary/Government, nonprofit and ERISA

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.

CORAA TeamUpdated November 5, 2026

Definition

GASB Statement No. 34, issued in 1999, set the basic financial reporting model for state and local governments. The model has government-wide financial statements prepared on the economic resources measurement focus and full accrual basis, fund financial statements, with governmental funds on the modified accrual basis, notes, management's discussion and analysis (MD&A), and other required supplementary information such as budgetary comparisons. Governments also report capital assets, including infrastructure, and depreciation. GASB Statement No. 103, issued in 2024, refines the model, including MD&A, for fiscal years beginning after June 15, 2025.

Why it matters in an audit or review

The reporting model determines the audit's structure and opinion units. The auditor tests the reconciliation between fund statements and government-wide statements, the identification of major funds using the 10 percent and 5 percent tests, and the capital asset records. Required supplementary information is not audited, but the auditor performs limited procedures on it under AU-C 730.

Example

Illustrative: a city's governmental funds report modified accrual revenue, while the government-wide statement shows full accrual revenue. The auditor checks the reconciliation items, such as capital outlay and long-term debt, between the two.

Common mistakes

Failing to test the major fund determination, which drives which funds receive their own opinion unit.

FAQ

Does the auditor opine on MD&A?

No. MD&A is required supplementary information, and the auditor applies limited procedures to it.

Sources

  • GASB, Statement No. 34, Basic Financial Statements-and Management's Discussion and Analysis-for State and Local Governments (1999)
  • GASB, Statement No. 103, Financial Reporting Model Improvements (2024)
  • AICPA, AU-C Section 730, Required Supplementary Information

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

  • 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.
  • 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. 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.
  • GAGAS (Yellow Book)
    GAGAS, published by the GAO as Government Auditing Standards or the Yellow Book, adds requirements on top of GAAS for audits of governments, entities receiving government funds, and single audits.

Go deeper

All glossary terms →

For US CPA firms

Join the CORAA waitlist

CORAA AI drafts audit working papers from your client’s QuickBooks books and does the first pass: lead schedules, tie-out, memos, draft notes and letters. CORAA Network reviewers clear every finding. Your firm reviews and signs.

  • First audit free, so you can judge the quality on a real file
  • Flat fee by entity size; messy books included
  • We work only with CPA firms, never their clients
See how it works →

* required