The Federal Accounting Standards Advisory Board (FASAB) on Tuesday issued a standard, effective immediately, that incorporates the hierarchy of generally accepted accounting principles (GAAP) into FASAB’s authoritative literature but makes no changes to the order of priority for accounting and financial reporting guidance.
Statement of Federal Financial Accounting Standards (SFFAS) no. 34 , The Hierarchy of Generally Accepted Accounting Principles for Federal Entities, Including the Application of Standards Issued by the Financial Accounting Standards Board , consists of the sources of accounting principles used to prepare financial statements of federal reporting entities that are presented in conformity with GAAP and the framework for selecting those principles.
SFFAS 34 also provides interim guidance for those federal entities that are currently applying financial accounting and reporting standards issued by FASB. SFFAS 34 allows federal entities that have issued general purpose financial reports before Oct. 19, 1999, in conformance with accounting and reporting principles issued by FASB, to continue to do so. In addition, SFFAS 34 provides interim guidance for federal entities that begin preparing GAAP-based financial statements for the first time.
Previously, the hierarchy for selecting the principles used to prepare financial statements by federal reporting entities was set forth in AICPA Statement on Auditing Standards (SAS) no. 91, The Federal GAAP Hierarchy, rather than in the authoritative literature of FASAB.