Accounting DeMYSTiFieD by Leita Hart

Author:Leita Hart
Language: eng
Format: epub
Publisher: McGraw-Hill Education
Published: 2010-12-26T16:00:00+00:00

Key Differences between Proprietary and Governmental and

Not-for-Profit Accounting

Governmental and not-for-profit accounting is different from proprietary accounting in several key ways:

• Both avoid the word profit.

• Both pool resources into categories, programs, or funds.

• Both require retitled and re-formatted financial statements.

GAAP for Government and Not-for-Profits

Governmental accounting and not-for-profit accounting also differ in who sets their standards. Governmental entities, such as municipalities, counties, and states, use generally accepted accounting principles (GAAP) promulgated by the Governmental Accounting Standards Board (GASB). Many not-for-profits follow GAAP promulgated by the Financial Accounting Standards Board (FASB). Some that operate like government entities may choose to use GASB standards.

With that said, let’s start with an overview of governmental accounting.

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