WHY GOVERNMENTAL ACCOUNTING AND FINANCIAL REPORTING IS—AND SHOULD BE—DIFFERENT



TABLE OF CONTENTS
Introduction and Scope ............................................................................................................... 1
Why Are Separate Accounting and Financial Accounting Reporting Standards
Essential for Governments? ..................................................................................................... 2
Major Environmental Differences between Governments and Businesses ......................... 3
How Do Existing Accounting and Financial Reporting Standards Reflect the
Different Needs of Stakeholders? ............................................................................................ 7
Conceptual Framework Differences .................................................................................... 7
Accounting and Financial Reporting Standards Differences .............................................. 9
Why Is There an Ongoing Need to Set Additional Governmental Accounting and
Financial Reporting Standards? ............................................................................................. 12
Conclusion ................................................................................................................................ 13
Appendix A: Distinguishing Characteristics of the Governmental Environment ................... 14
Appendix B: Additional Examples of How Governmental Accounting Differs from
Business Enterprise Accounting ....................................................................... 21
Appendix C: Brief History of Governmental Accounting and Financial Reporting
Standards Setting .............................................................................................. 26
Appendix D: Significance of State and Local Governments ................................................... 29
Appendix E: Glossary .............................................................................................................. 31