The “Other” GASB Statement

by Brittney Williams, CPA, CGFM, Audit Manager

Posted on February 15, 2016

Effective fiscal year 2016 all governmental entities will be required to report investments at fair value as required by GASB 72.This statement has received much attention over the last year as it represents a fairly significant change in the financial statements and notes to the financial statements if applicable for your entity.However, there is another statement that went into effect for fiscal year 2016, which is GASB Statement No. 76,The Hierarchy of Generally Accepted Accounting Principles for State and Local Governments. This statement has been in the shadow of GASB 72, but it holds some very valuable information you should be aware of for this reporting year.

The purpose of GASB 76 is to identify in the context of the current financial reporting environment, the hierarchy of generally accepted accounting principles “GAAP”.This GAAP hierarchy represents accounting principles used to prepare the financial statements of state and local governments in conformity with GAAP.This statement supersedes Statement No. 55 and reduces the categories from four to two and incorporates the use of nonauthoritative literature for those times when a specific treatment of an event is not specified in authoritative guidance. In addition, this statement raises the importance of the implementation guides.

The two categories of authoritative guidance are as follows:

Category A

  • GASB Statements
  • Formerly issued Interpretations

Category B

  • GASB Technical Bulletins
  • GASB Implementation Guides (Q&A)
  • AICPA literature cleared by the GASB


One key element to note is that Category A always takes precedence over Category B.Guidance in each category is authoritative if it meets ALL of the following criteria:

Category A   Category B
Formally approved by the Board   Restricted to providing clarification
For the purpose of creating, amending, superseding, or interpreting standards …….. Cleared by the Board
Exposed for a period of public comment   Specifically made applicable to state and local governmental entities
    Exposed for a period of public comment.

Nonauthoritative sources include GASB Concepts, FASB, FASAB, PSASB, IASB, AICPA literature, widely used practices in state and local governments and literature of other professional associations.Some other items to Statements?Is it relevant to the particular circumstance?Does other authoritative GAAP guidance exist for similar transactions?

The goal with this standard, as with many others that have been issues is that the requirements set forth will improve the usefulness and enhance the comparability of financial statements among governments.