Guiding Principles

In establishing concepts and standards, the GASB exercises its judgment after research, due process, and careful deliberation. It is guided by these principles:

  • To be objective and neutral in its decision making and to ensure, as much as possible, that the information resulting from its standards is a faithful representation of the effects of state and local government activities. Objective and neutral mean freedom from bias, precluding the GASB from placing any particular interest above the interests of the many who rely on the information contained in financial reports.
  • To weigh carefully the views of its constituents in developing concepts and standards so that they will:
    • Meet the accountability and decision-making needs of the users of government financial reports, and
    • Gain general acceptance among state and local government preparers and auditors of financial reports.
To establish standards only when the expected benefits exceed the perceived costs. The GASB strives to determine that proposed standards (including disclosure requirements) fill a significant need and that the costs they impose, compared with possible alternatives, are justified when compared to the overall public benefit.
  • To consider the applicability of its standards to the separately issued general purpose financial statements of governmentally owned special entities. The GASB specifically evaluates similarities of special entities and of their activities and transactions in both the public and private sectors, and the need, in certain instances, for comparability with the private sector.
  • To bring about needed changes in ways that minimize disruption of the accounting and financial reporting processes. Reasonable effective dates and transition provisions are established when new standards are introduced. The GASB considers it desirable that change should be evolutionary to the extent that can be accommodated by the need for understandability, relevance, reliability, comparability, and consistency.
  • To review the effects of past decisions and interpret, amend, or replace standards when appropriate.

Due Process

The GASB is committed to following an open, orderly process for standards setting. The GASB will endeavor at all times to keep the public informed of important developments in its operations and activities.

The due process procedures followed by the GASB are designed to permit timely, thorough, and open study of accounting and financial reporting issues. These procedures encourage broad public participation in the accounting standard-setting process and communication of all points of view and expressions of opinion at all stages of the process. The GASB recognizes that general acceptance of its conclusions is enhanced by demonstrating that the comments received in due process are considered carefully.


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Page last modified: Oct. 14, 2012