Government Accounting Key Terms

Utilize government accounting key terms to improve public sector accountability

In government accounting, an entity must adhere to a different set of standards than its private sector counterparts. To satisfy government accounting standards, there are many different parties such as elected officials, governmental auditors, private and public groups and U.S. citizens in general. Each of these bodies will want to know how your company spent public funds to complete a task or project. Therefore, it's important to know the key terms in government accounting. These terms will give you the proper knowledge base on which to build or improve your governmental accountability and transparency. Before you begin a search for the pertinent information, check out these main government accounting terms.

 

Financial reporting model

The financial reporting model is the accounting model the Governmental Accounting Standards Board established as a framework for relevant reports. The rules for the financial reporting model will change over time. Therefore, you'll need to not only understand this model, but also monitor the Governmental Accounting Standards Board for any changes to the model.
Try: Review the tutorial on the basics of the financial reporting model from George Mason University. Purchase the government accounting and financial reporting handbook available at Thomson Reuters.

Governmental Accounting Standards Board

The purpose of the Governmental Accounting Standards Board is to set and improve the governmental accounting standards for state and local entities. The Governmental Accounting Standards Board will issue ruling and clarification regarding governmental accounting and serve as the ultimate arbiter for any accounting issues or questions.
Try: Examine the plain language documents and information available at the Governmental Accounting Standards Board. Use the information from Quick MBA for clarification on the purpose of the Governmental Accounting Standards Board.

Federal Accounting Standards Advisory Board

The Federal Accounting Standards Advisory Board provides information on governmental accounting at the national level. Conversely, the Governmental Accounting Standards Board provides ruling, statements, guidelines and arbitration for the state and local level.
Try: Evaluate the Federal Accounting Standards Advisory Board reports on various accounting standards from the federal government. Examine the company description of the Federal Accounting Standards Advisory Board at Hoovers.

The yellow book

The yellow book is simply another name for the governmental auditing standards. It's issued by the U.S. Government Accountability Office and contains the guidelines for any audits that may occur from the government.
Try: Study the yellow book updates from the Government Accountability Office.

Nonexchange transactions

Nonexchange transactions are the transfer of benefits from one party to another without directly receiving equal consideration. Government accounting divides these transactions into four categories: derived tax revenues, government-mandated nonexchange transactions, imposed nonexchange revenues and voluntary nonexchange transactions.
Try: Assess the definition of a nonexchange transaction available at Investing Minds. For a detailed explanation of the various nonexchange transactions, review the report at North Carolina Office of the State Controller.

Pensions

A pension is the governmental employee's retirement plan, and accounting for this plays a large role in the day-to-day operations of any government entity. Pension information isn't as relevant if your company is a private entity. However, that doesn't mean the information isn't pertinent.
Try: Use the resources available at the Library of Economics and Liberty and Cornell University to understand pensions.

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