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Financial Accounting for Local and State School Systems: 2009 Edition
NCES 2009-325
June 2009

Chapter 4: Governmental Accounting — Governmental GAAP Hierarchy

Category (a) consists of GASB Statements and Interpretations and American Institute of Certified Public Accountants (AICPA) and Financial Accounting Standards Board (FASB) pronouncements applicable specifically to state and local governmental entities by GASB Statements or Interpretations (periodically incorporated into the Codification of Governmental Accounting and Financial Reporting Standards, most recently published in 2005 [GASB 2005a]).

Category (b) consists of GASB Technical Bulletins and AICPA Industry Audit and Accounting Guides and Statements of Position made applicable specifically to state and local governments by AICPA and approved by GASB.

Category (c) consists of AICPA Accounting Standards Executive Committee (AcSEC) Practice Bulletins made applicable to state and local governments by AICPA and approved by GASB. (This category includes the consensus positions of groups of accountants organized by GASB to reach a consensus on accounting issues applicable to state and local governmental entities. However, GASB had not organized any such groups as of the release date of this handbook.)

Category (d) includes GASB Implementation Guides published by GASB staff. Also included are practices that are widely recognized and prevalent in state and local government.

In the absence of a pronouncement covered by AICPA Rule 203 or another source of established accounting principles, other accounting literature, such as the following, may be considered, depending on its relevance to the circumstances:

  • GASB Statements;
  • Pronouncements referred to in SAS 69, paragraph 10, categories (a) through (d), on the hierarchy of authority for nongovernmental entities when not specifically made applicable to state and local governments:

    • FASB Statements;
    • AICPA Issues Papers;
    • statements of the International Accounting Standards Board;
    • pronouncements of other professional associations or regulatory agencies;
    • Technical Information Service Inquiries and Replies included in AICPA Technical Practice Aids; and
    • accounting textbooks, handbooks, and articles.

The appropriateness of other accounting literature depends on its relevance to particular circumstances, the specificity of the guidance, and the general recognition of the issuer or author as an authority.