What is GASB? The Complete Guide
The Governmental Accounting Standards Board (GASB) is the independent organization that sets U.S. accounting and financial reporting standards for state and local governments. GASB defines how public entities measure, record, and report their financial activity, so taxpayers, public officials, and investors have clear, consistent, and reliable data, and businesses/governments are held accountable (literally).
GASB was established in 1984 and is often pronounced “Gazbee”, not unlike the Fitzgerald tycoon. GASB continues to update its guidance, and these GASB updates include the newest standards, GASB 101-104. These introduce changes to compensated absences, risk disclosures, and the overall financial reporting framework.
In this blog, we will be addressing all things related to the Governmental Accounting Standards Board, including how GASB works, what GAAP is, how many GASB statements exist, and why GASB standards are important for US municipal and governmental entities. At the end, we will discuss some common FAQs and detail the potential benefit of utilizing lease accounting software in the wake of all the recent changes in GASB standards.
The three newest GASB updates are as follows:
Besides reviewing existing and establishing new standards in accounting, the Government Accounting Standards Board also works to educate the public about its standards. They host discussions, speeches, and roundtables, and issue user guides to help taxpayers understand issued financial statements.
It is in these gatherings that organizations and accountants voice their concerns and problems with current accounting practices. These comments often initiate the birth of a new accounting standard. It is for this reason that the voices of experts in the field of accounting are so important to the constant improvement of lease accounting standards; the GASB board listens to these concerns and researches their legitimacy, thus beginning the process of creating new or improving existing accounting guidance.
The GASB is made up of seven board members, six of whom are part-time board members, accompanied by one full-time chairman. The GASB staff supports the board in its task forces and efforts to improve accounting standards wherever possible. The Governmental Accounting Standards Advisory Council, or GASAC, is another important part of the Government Accounting Standards Board. Composed of around 30 experts in various accounting-related fields, this group advises the GASB on arising issues, new agenda items, and other matters.
The GASB gets funding from publishing revenue, investment income, and accounting support fees paid by dealers who trade in municipal bonds.
There are about 100 GASB standards in total that are designed to educate and guide the public on financial reporting and accounting. However, these standards are constantly being monitored, updated, reviewed, and reshaped by ongoing GASB updates.
While GASB regularly issues new guidance, many of the most significant changes affecting governments today stem from a combination of recently issued standards and foundational updates that continue to reshape financial reporting in practice.
In the last few years, GASB has released several new statements aimed at improving transparency, consistency, and decision-usefulness in government financial reporting:
Together, these GASB updates reflect an ongoing effort to modernize government accounting and improve the clarity of financial statements for stakeholders.
In addition to newer statements, GSAB 87 (Leases) and GASB 96 (SBITAS) remain two of the most impactful standards for state and local governments.
GASB 87, effective for fiscal years beginning after June 15, 2021, fundamentally changed lease accounting by requiring governments to recognize lease liabilities and right-of-use assets on the balance sheet.
GASB 96, effective for fiscal years beginning after June 15, 2022, extended this model to subscription-based information technology arrangements (SBITAs), requiring governments to recognize subscription assets and liabilities for qualifying cloud-based software agreements.
While these standards are no longer “new,” they continue to present ongoing challenges as governments manage implementation, data accuracy, disclosures, and audit readiness—especially for entities with large or decentralized lease and IT portfolios.
The GASB is shouldered with the responsibility of setting the highest-quality standards, and to do so, they utilize a process called the “Rule of Procedure”. The procedure is designed to encourage broad public participation in the standard-setting process, as these wide-reaching financial matters affect everyone.
For most issues, the GASB identifies an accounting problem and how to solve it. They collect information by speaking to those most affected by the problem; usually, a consortium of companies, governments, auditors, and/or investors. The board consults with advisory academics and experts to cross-examine their findings with modern accounting theory.
After the consultation, the board does its own research and commissions additional research if necessary before publishing a discussion document outlining the issues and possible remedies, so the public can have its voice in the matter. They then move on to broadly distribute an exposure draft of a specific proposed standard. The GASB then conducts public hearings or round table discussions on the exposure draft. The GASB then redeliverates based on comments and research, and then the final standard is issued.
After the new standard has passed through these stages, the GASB works hard to educate the public on the changes to provide the smoothest transition possible.
With the similarities in acronyms, what is the difference between GASB vs GAAP? While they overlap in their scopes, they are not the same. The Governmental Accounting Standards Board (GASB) is the organization that determines and updates generally accepted accounting principles (GAAP) for government entities.
Thus, GASB is the acting body that enforces and updates GAAP for governments, which are all different accounting standards that are constantly evolving.
The GASB and the FASB (Financial Accounting Standards Board) are very similar when it comes to overall intent. They both exist to develop and implement clear and informative accounting standards.
However, the scopes in which they function differ. GASB deals with financial reporting by government entities, while the FASB deals with financial reporting for public and private-sector organizations. FASB updated ASC 840 by announcing ASC 842. Both the GASB and FASB are independent, private-sector organizations that are overseen by the Financial Accounting Foundation (FAF). The FAF is an independent, private sector, not-for-profit organization responsible for oversight, administration, financing, and appointment of the FASB and GASB.
GASB’s scope is state and local governments in the United States, as well as other municipal-type entities, such as airports, school districts, and some hospitals. These entities are required to follow the standards set by the Governmental Accounting Standards Board.
One of the most recent GASB standards is GASB 87, which drastically changed lease accounting for the entities that must follow the rules and regulations of the Government Accounting Standards Board. Check out our guide to GASB 87 implementation here for more information on best practices to avoid an audit.
GASB standards play a direct role in how governments handle lease and subscription-based IT arrangements (SBITAs). GASB 87 (leases) and GASB 96 (SBITAs) require governments to bring these agreements onto the balance sheet, calculate short and long-term liabilities, and produce standardized disclosures. For many entities, this means tracking numerous leases across multiple departments, each with different terms, extensions, and payment structures.
Manually managing this data in spreadsheets creates risk. Small errors in lease terms, interest rates, or commencement dates can produce incorrect liabilities and disclosures. GASB’s guidance is precise, and compliance with GASB updates depends on accurate calculations and consistent documentation.
That’s where automation makes a measurable difference. Purpose-built lease accounting software:
For government teams already stretched thin, automating critical steps in the lease accounting process removes avoidable errors and makes staying compliant with GASB 87 and 96 significantly easier. It’s a practical way to increase accuracy, save time, and strengthen reporting without adding more work to the team’s plate.
Staying compliant with evolving GASB standards doesn’t have to be overwhelming. Crunchafi’s Lease Accounting software helps you deliver accurate calculations, compliant disclosures, and audit-ready outputs without the manual work. Whether your organization manages a single lease or an entire portfolio, our intuitive tools make GASB compliance faster, simpler, and far less risky.
The benefits of using Crunchafi’s Lease Accounting software include:
Ready to start your error-free lease accounting adventure today? Request a demo!
The newest GASB standards are:
Statement No. 103, issued April 2024 - Financial Reporting Model Improvements: This standard improves key components of the financial reporting model to increase its effectiveness in providing information for decision making and assessing a government’s accountability. The requirements of this Statement are effective for fiscal years beginning after June 15, 2025, and all reporting periods thereafter.
Statement No. 104, issued September 2024 - Disclosure of Certain Capital Assets: Provides users of government financial statements with essential information about certain types of capital assets. The requirements of this Statement are effective for fiscal years beginning after June 15, 2025, and all reporting periods thereafter.
GASB sets accounting standards specifically for U.S. state and local governments, while IFRS standards are developed by the International Accounting Standards Board (IASB). IFRS Accounting standards are a global accounting language used by companies in more than 140 jurisdictions to report their financial health.
The Governmental Accounting Standards Board is in charge of creating accounting standards. They are constantly reviewing and updating standards, so it can sometimes be difficult for a company's lease accounting processes to continuously maintain compliance with the newest standards in accounting.
GASB is the organization that creates and reinforces GAAP. The Governmental Accounting Standards Board is the governing body that determines the accounting standards for US state and local governments. Each of the GASB standards is based on generally accepted accounting principles.
The GASB principles are all generally accepted accounting principles, also known as GAAP.
GASB accounting principles apply to US states and local governments and other municipal-type entities that are required to publicize their finances in order to maintain transparency.
The Governmental Accounting Standards Board has been around for over 40 years, and in those years of operation, they have released 104 standards that contain rules and regulations for government accounting practices today.
The latest GASB statement is Statement No. 104, issued September 2024. This statement provides users of government financial statements with essential information about certain types of capital assets. The requirements of this Statement are effective for fiscal years beginning after June 15, 2025, and all reporting periods thereafter.
