GASB state 34
On June 30, 1999 the GASB passed statement number 34. Statement 34 establishes new accounting requirements for state and local governments that are scheduled to begin on June 15, 2002. There are three phases scheduled for the implementation of statement 34, each depending on the size of the government. The largest governments must meet the requirement first while the smaller governments have more time to comply with the statement. Statement 34 will improve the governmental accounting system in many ways. First, statement 34 will create easier to understand financial statements. This will allow people other than accountants to understand the information within a government financial statement. Secondly, statement 34 will help city officials keep track of fixed assets that need to be replaced or improved. This addition is important because city officials often forget that assets have been in use for too long, resulting in costly improvements that could be avoided. Furthermore, statement 34 will allow readers to determine whether the government has improved since the last fiscal year. These goals will be accomplished in several ways. First, a management discussion and analysis (MD&A) statement will be required. Wit
34 will improve financial reporting for state and local governments in many ways. Many governments find the time constraints difficult, given the Y2K problem is still not fixed in many states. Since the full accrual method will be used, governments will report all revenues they have earned. In addition, because of the new asset management methods many states will have to value their existing assets. Secondly, the financial reports will be more accurate. Other states, such as Michigan, already use procedures similar to those of statement 34. This could prevent major damage to government assets that could otherwise be neglected, such as sewers and drainpipes. hin this statement, managers will discuss the financial achievements of the governmental entity during the fiscal year. Under this system, governments will report all revenues earned in a given period. The management discussion and analysis will give people with little or no accounting background a good idea of the financial position a government is in. This will greatly change the bottom line of many governmental entities. Another notable change made by statement 34 is the adoption of the full accrual method. . This will require governments to create new data collection methods.
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