Discuss the differences in measurement focus and basis of accounting related to:
The conceptual differences when comparing measurement focus verses the basis; measurement focus refers to what items are being reported in the financial statement. It measures both current and long term liabilities. The basis focuses on when transactions and events are recognized in the accounting records. (Copley, 2015).
Differences in revenue recognition as determined through modified accrual accounting; are recognized when measureable and available to finance the project during the period. (Copley, 2015).
Differences in expenses/expenditures recognition states that expenditures are recognized in the period in which the fund liability incurred. Expenditures not only affect the income statement; they affect other financial data synopses, which is what finance people often call accounting statements (Codjia, Demand Media). Expenses are recognized when they happen and affect retained earnings. In the case of exchange transactions, expenses are often matched with the revenues they generate (Copley, 2015).
Differences in recognition of fixed assets which are generally not considered to be a liquid form of assets unlike current assets and they are not reported in the governmental fund balance sheets. This type of asset capitalizes and depreciates (Copley, 2015).
Differences in the recording of long-term debt using economic resources; long-term debt is not recorded as a liability (Copley, 2015).
Exercise 1-9
What is the mission of the GASB?
The mission is to establish and improve standards of state and local governmental accounting and financial reporting that will; Result in useful information for users of financial reports, and guide and educate the public, including issuers, auditors, and users of those financial reports.
Reference
GASB (2014) GASB Mission Retrieved July 2,