Statement of Federal Financial Accounting Standards 34 

July 28, 2009 

The Hierarchy of Generally Accepted Accounting Principles, 

Including the Application of Standards Issued by the Financial 

Accounting Standards Board 

Federal Accounting Standards Advisory Board 
THE FEDERAL ACCOUNTING STANDARDS ADVISORY BOARD 

The Secretary of the Treasury, the Director of the Office of Management and Budget (OMB), 

and the Comptroller General, established the Federal Accounting Standards Advisory Board 

(FASAB or “the Board) in October 1990. FASAB is responsible for promulgating accounting 

standards for the United States Government. These standards are recognized as generally 

accepted accounting principles (GAAP) for the Federal Government. 

An accounting standard is typically formulated initially as a proposal after considering the 

financial and budgetary information needs of citizens (including the news media, state and local 

legislators, analysts from private firms, academe, and elsewhere), Congress, Federal 

executives, Federal program managers, and other users of Federal financial information. The 

proposed standards are published in an Exposure Draft for public comment. In some cases, a 

discussion memorandum, invitation for comment, or preliminary views document may be 

published before an exposure draft is published on a specific topic. A public hearing is 

sometimes held to receive oral comments in addition to written comments. The Board considers 

comments and decides whether to adopt the proposed standard with or without modification. 

After review by the three officials who sponsor FASAB, the Board publishes adopted standards 

in a Statement of Federal Financial Accounting Standards. The Board follows a similar process 

for Statements of Federal Financial Accounting Concepts, which guide the Board in developing 

accounting standards and formulating the framework for Federal accounting and reporting. 

Additional background information is available from the FASAB or its website: 

• “Memorandum of Understanding among the General Accounting Office, the Department 

of the Treasury, and the Office of Management and Budget, on Federal Government Accounting 

Standards and a Federal Accounting Standards Advisory Board.” 

• “Mission Statement: Federal Accounting Standards Advisory Board”, Exposure drafts, 

Statements of Federal Financial Accounting Standards and Concepts, FASAB newsletters, and 

other items of interest are posted on FASAB’s website at: www.fasab.gov. 

Federal Accounting Standards Advisory Board 

441 G Street, NW, Suite 6814 

Mail stop 6K17V 

Washington, DC 20548 

Telephone 202-512-7350 

FAX – 202-512-7366 

www.fasab.gov

This is a work of the U. S. government and is not subject to copyright protection in the United 

States. It may be reproduced and distributed in its entirety without further permission from 

FASAB. However, because this work may contain copyrighted images or other material, 

permission from the copyright holder may be necessary if you wish to reproduce this material 

separately. 
Summary 3

____________________________________________________________________________________ 

Federal Accounting Standards Advisory Board 

The Hierarchy of Generally Accepted Accounting Principles, Including the Application of 

Standards Issued by the Financial Accounting Standards Board 

July 28, 2009 

Summary 

The Federal Accounting Standards Advisory Board (FASAB) is the body designated by 

the American Institute of Certified Public Accountants (AICPA) as the source of 

generally accepted accounting principles (GAAP) for federal reporting entities.1 As 

such, the FASAB is responsible for identifying the GAAP hierarchy for federal reporting 

entities. The GAAP hierarchy consists of the sources of accounting principles and the 

framework for selecting the principles used in the preparation of general purpose 

financial reports2 of federal reporting entities that are presented in conformity with 

generally accepted accounting principles. However, the hierarchy for selecting the 

principles used in the preparation of general purpose financial reports by federal 

reporting entities was set forth in the AICPA Statement on Auditing Standards (SAS) 

No. 91, Federal GAAP Hierarchy, rather than in the authoritative literature of the 

FASAB. This Statement incorporates the hierarchy into the FASAB’s authoritative 

literature. 

Incorporating the GAAP hierarchy into the authoritative literature of the FASAB is not 

intended to cause a sudden and dramatic change in practice for federal entities. This 

Statement permits those federal entities currently applying financial accounting and 

reporting standards issued by the Financial Accounting Standards Board (FASB) to 

continue to do so. In addition, given that the FASAB is the source of GAAP for federal 

entities, the Statement clarifies that a federal entity that is preparing GAAP-based 

general purpose financial reports for the first time is required to implement FASAB 

standards unless, in consultation with its auditors and bodies with oversight authority, 

the entity clearly demonstrates that the needs of its primary users would be best met 

through the application of FASB standards. 

 

1

 Statement of Federal Financial Accounting Concepts (SFFAC) 2, Entity and Display, discusses the 

criteria for defining federal reporting entities. Also, the terms federal reporting entity and federal entity are 

used interchangeably throughout this Statement. 

2

 The term general purpose financial report is used throughout this Statement as a generic term to refer to 

the report that contains the entity’s financial statements that are prepared pursuant to generally accepted 

accounting principles. In the federal government, the report is known as the Performance and 

Accountability Report or the Agency Financial Report. 
Table of Contents 4

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Federal Accounting Standards Advisory Board 

The Hierarchy of Generally Accepted Accounting Principles, Including the Application of 

Standards Issued by the Financial Accounting Standards Board 

July 28, 2009 

Table of Contents 

Summary........................................................................................................................3

Introduction ................................................................................................................... 5

Purpose ....................................................................................................................... 5

Materiality .................................................................................................................... 5

Effective Date .............................................................................................................. 6

Accounting Standards.................................................................................................. 7

Scope .......................................................................................................................... 7

The Hierarchy of Generally Accepted Accounting Principles....................................... 7

Other Accounting Literature......................................................................................... 8

Application of Standards Issued by the Financial Accounting Standards Board.......... 9

Effective Date ............................................................................................................ 10

Appendix A: Basis for Conclusions .......................................................................... 11

Project History ........................................................................................................... 11

Application of Standards Issued by the Financial Accounting Standards Board........ 11

Application to Legislative and Judicial Branches ....................................................... 12

Exposure Draft........................................................................................................... 13

Clarifying the GAAP Hierarchy and Other Accounting Literature ................... 14

Entities Following FASB GAAP .......................................................................... 15

Board Approval.......................................................................................................... 16

Appendix B: Abbreviations ........................................................................................ 17

Appendix C: Glossary................................................................................................. 18
Introduction 5

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Federal Accounting Standards Advisory Board 

The Hierarchy of Generally Accepted Accounting Principles, Including the Application of 

Standards Issued by the Financial Accounting Standards Board 

July 28, 2009 

Introduction 

 Purpose 

1. The objective of this Statement is to identify the sources of accounting 

principles and the framework for selecting the principles used in the 

preparation of general purpose financial reports of federal reporting entities3

that are presented in conformity with generally accepted accounting principles 

(the GAAP hierarchy). 

a. This Statement responds to a request from the American Institute of 

Certified Public Accountants (AICPA) that FASAB incorporate the GAAP 

hierarchy, which currently resides in the professional auditing literature, 

into the accounting literature. 

b. This Statement also addresses (1) whether federal entities currently 

applying standards issued by the Financial Accounting Standards Board 

(FASB) may continue that practice, and (2) whether federal entities that 

are preparing GAAP-based general purpose financial reports for the first 

time may also apply FASB standards. 

 Materiality 

2. The provisions of this Statement need not be applied to immaterial items. The 

determination of whether an item is material depends on the degree to which 

omitting or misstating information about the item makes it probable that the 

judgment of a reasonable person relying on the information would have been 

changed or influenced by the omission or the misstatement. 

 

3

 Statement of Federal Financial Accounting Concepts 2, Entity and Display, provides criteria for 

identifying federal reporting entities. In addition, the Board is currently developing standards defining the 

federal reporting entity. 
Introduction 6

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Federal Accounting Standards Advisory Board 

The Hierarchy of Generally Accepted Accounting Principles, Including the Application of 

Standards Issued by the Financial Accounting Standards Board 

July 28, 2009 

 Effective Date 

3. The requirements in this standard are effective upon its issuance. 
Accounting Standards 7

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Federal Accounting Standards Advisory Board 

The Hierarchy of Generally Accepted Accounting Principles, Including the Application of 

Standards Issued by the Financial Accounting Standards Board 

July 28, 2009 

Accounting Standards 

Scope 

4. This Statement applies to the general purpose financial reports of all federal 

reporting entities that are presented in conformity with generally accepted 

accounting principles (GAAP).4 

The Hierarchy of Generally Accepted Accounting Principles 

5. The hierarchy of generally accepted accounting principles, hereafter referred 

to as the GAAP hierarchy, governs what constitutes GAAP for federal 

reporting entities. It lists the priority sequence of pronouncements that a 

federal reporting entity should look to for accounting and financial reporting 

authoritative guidance. The sources of accounting principles that are 

generally accepted are categorized in descending order of authority as 

follows: 

a. Officially established accounting principles consist of FASAB Statements 

of Federal Financial Accounting Standards (Standards) and 

Interpretations. FASAB Standards and Interpretations will be periodically 

incorporated in a publication by the FASAB. 

b. FASAB Technical Bulletins and, if specifically made applicable to federal 

reporting entities by the AICPA and cleared5 by the FASAB, AICPA 

Industry Audit and Accounting Guides.6

c. Technical Releases of the Accounting and Auditing Policy Committee of 

the FASAB. 

 

4

 The AICPA has designated the FASAB as the source of GAAP for federal reporting entities. Therefore, 

FASAB GAAP would be the appropriate accounting standards for federal reporting entities in the 

executive, legislative, and judicial branches. 5

 For purposes of interpreting category (b), the word cleared means that the FASAB does not object to the 

pronouncement’s issuance. 

6

 Such pronouncements specifically made applicable to federal reporting entities are presumed to have 

been cleared by the FASAB, unless the pronouncement indicates otherwise. 
Accounting Standards 8

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Federal Accounting Standards Advisory Board 

The Hierarchy of Generally Accepted Accounting Principles, Including the Application of 

Standards Issued by the Financial Accounting Standards Board 

July 28, 2009 

d. Implementation guides published by the FASAB staff, as well as 

practices that are widely recognized and prevalent in the federal 

government. 

6. If the accounting treatment for a transaction or event is not specified by a 

pronouncement in category (a), a federal reporting entity should consider 

whether the accounting treatment is specified by an accounting principle from 

a source in another category. In such cases, if categories (b)–(d) contain 

accounting principles that specify accounting treatments for a transaction or 

event, the federal reporting entity should follow the accounting treatment 

specified by the accounting principle from the source in the highest 

category—for example, follow category (b) treatment over category (c) 

treatment. 

7. If the accounting treatment for a transaction or event is not specified by a 

pronouncement or established in practice as described in categories (a)–(d), 

a federal reporting entity should then consider accounting principles for 

similar transactions or events within categories (a)–(d) before considering

Other Accounting Literature discussed in paragraph 8. For example, it might 

be appropriate to report the event or transaction by applying, in a similar 

manner, an accounting principle established within categories (a)-(d) for an 

analogous transaction or event on the basis of its substance.7

 A federal 

reporting entity should not follow the accounting treatment specified in 

accounting principles for similar transactions or events in cases in which 

those accounting principles either (a) specifically prohibit the application of 

the accounting treatment to the particular transaction or event or (b) indicate 

that the accounting treatment should not be applied to other transactions or 

events by analogy. 

Other Accounting Literature 

8. Other Accounting Literature includes, for example, FASAB Concepts 

Statements; the pronouncements referred to in category (b) of paragraph 5 

when not specifically made applicable to federal reporting entities by the 

FASAB; pronouncements of other accounting and financial reporting 

standards-setting bodies, such as the FASB, Governmental Accounting 

Standards Board, International Accounting Standards Board, and 

 

7

 Generally accepted accounting principles recognize the importance of reporting transactions and events 

in accordance with their substance. Consideration should be given to whether the substance of 

transactions or events differs materially from their form. 
Accounting Standards 9

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Federal Accounting Standards Advisory Board 

The Hierarchy of Generally Accepted Accounting Principles, Including the Application of 

Standards Issued by the Financial Accounting Standards Board 

July 28, 2009 

International Public Sector Accounting Standards Board; professional 

associations or regulatory agencies; and accounting textbooks, handbooks, 

and articles. The appropriateness of other accounting literature depends on 

its relevance to particular circumstances, the specificity of the guidance, and 

the general recognition of the issuer or author as an authority. For example, 

FASAB Concepts Statements would normally be more influential than other 

sources in this category. 

 

Application of Standards Issued by the Financial Accounting Standards 

Board 

9. Some federal entities, including government corporations listed in the 

Government Corporation Control Act and certain others, such as the United 

States Postal Service, continue to publish financial reports pursuant to the 

accounting and reporting standards issued by the FASB. Some entities also 

may be required to prepare statements pursuant to standards set by a 

regulatory agency (e.g., the Federal Energy Regulatory Commission 

(FERC)). General purpose financial reports prepared in conformity with 

accounting standards issued by the FASB also may be regarded as in 

conformity with GAAP for those entities that have in the past issued such 

reports.8

10. Except as provided in paragraph 11, a federal entity that is preparing GAAPbased general purpose financial reports for the first time should implement 

FASAB standards as FASAB is the preferred method of reporting for federal 

entities. 

11. In rare instances, a federal entity that is preparing GAAP-based general 

purpose financial reports for the first time may, in consultation with its auditors 

and bodies with oversight authority, elect to apply standards issued by the 

FASB if the entity clearly demonstrates that the needs of its primary users 

would be best met through the application of FASB standards. Unique user 

needs can arise from various sources that include, but are not limited to, 

investors, SEC requirements, bondholders, and customers. Entities may 

determine that the application of standards issued by the FASB more 

 

8

 The FASAB has an existing project underway that will assist the Board in determining whether certain 

federal entities should be permitted to continue applying FASB GAAP and, if so, whether additional 

reporting should be required. This project will also consider whether federal entities should be permitted 

to convert from FASB standards to International Financial Reporting Standards published by the 

International Accounting Standards Board. 
Accounting Standards 10

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Federal Accounting Standards Advisory Board 

The Hierarchy of Generally Accepted Accounting Principles, Including the Application of 

Standards Issued by the Financial Accounting Standards Board 

July 28, 2009 

appropriately meets these unique user needs. This determination should 

involve a number of considerations. Examples of factors to consider include 

but are not limited to: 

a. The entity’s primary funding is derived from a source other than through 

annual federal appropriations. 

b. The entity has been delegated the financial and operational authority to 

carry on its activities in a manner similar to private business enterprises. 

c. The entity sells goods and/or services to individuals outside of the 

government reporting entity as its principal activity. 

d. The entity is intended to, in the normal course of its operations, maintain 

its operations and meet its liabilities from revenues received from 

sources outside of the federal government reporting entity. 

e. It is desirable to compare general purpose financial reports of the federal 

entity that is preparing GAAP-based general purpose financial reports 

for the first time with an existing entity that is already following FASB 

GAAP. 

12. While the application of standards issued by the FASB may be acceptable 

for a limited number of federal entities as noted above, entities that have 

already implemented standards issued by the FASAB should continue to 

apply the federal standards, as FASAB is the preferred method of reporting 

for federal entities. 

Effective Date 

13. The requirements in this standard are effective upon its issuance. 

The provisions of this Statement need not be applied to immaterial items.
Appendix A: Basis for Conclusions 11

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Federal Accounting Standards Advisory Board 

The Hierarchy of Generally Accepted Accounting Principles, Including the Application of 

Standards Issued by the Financial Accounting Standards Board 

July 28, 2009 

Appendix A: Basis for Conclusions 

This appendix discusses some factors considered significant by Board members in 

reaching the conclusions in this Statement. It includes the reasons for accepting certain 

approaches and rejecting others. Individual members gave greater weight to some 

factors than to others. The standards enunciated in this Statement–not the material in 

this appendix–should govern the accounting and reporting for specific transactions, 

events, or conditions. 

Project History 

A1. Representatives of the American Institute of Certified Public Accountants 

(AICPA) requested that the U.S. accounting standards-setters consider 

adopting certain guidance for accounting and financial reporting issues 

that now reside in the professional auditing literature. In July 2008, the 

FASAB joined the Governmental Accounting Standards Board in 

responding to this request. 

A2. In October 1999, The AICPA designated the FASAB as the standardssetting body for federal entities. As such, the FASAB is responsible for 

identifying the sources of accounting principles and providing federal 

entities with a framework for selecting the principles used in the 

preparation of general purpose financial reports that are presented in 

conformity with GAAP (GAAP hierarchy). The Board believes that 

incorporation of the GAAP hierarchy into the FASAB’s authoritative 

literature would more clearly convey that financial statement preparers are 

responsible for selecting the sources of the principles to be used in the 

preparation of general purpose financial reports that are presented in 

conformity with GAAP. The structure presented in this Statement 

generally carries forward the hierarchy as set forth in SAS 91 and the 

Office of Management and Budget (OMB) Circular A-136, Financial 

Reporting Requirements. 

Application of Standards Issued by the Financial Accounting Standards Board 

A3. Although the FASAB’s standards have been recognized as GAAP for 

federal entities (FASAB GAAP) since October 1999, some federal entities 

follow GAAP for nongovernmental entities promulgated by the private 

sector Financial Accounting Standards Board (FASB GAAP). For 

example, federal government corporations, the U.S. Postal Service, 

certain component entities of the U.S. Department of the Treasury, and 
Appendix A: Basis for Conclusions 12

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Federal Accounting Standards Advisory Board 

The Hierarchy of Generally Accepted Accounting Principles, Including the Application of 

Standards Issued by the Financial Accounting Standards Board 

July 28, 2009 

some smaller entities in the executive and legislative branches have 

historically applied FASB GAAP and continue to do so. 

A4. In early 2000, the FASAB recognized this practice as acceptable for those 

entities that had been following FASB GAAP to avoid an immediate and 

unanticipated requirement that these federal entities follow federal GAAP 

after the FASAB was recognized as the Rule 203 standards-setting body 

for the federal government. This guidance was published in the January – 

March 2000 issue of FASAB News 9 and was intended as a temporary 

measure in light of the unanticipated consequences of Rule 203 

recognition. The existence of the issue has also been acknowledged in 

Statement of Federal Financial Accounting Concepts (SFFAC) 2, Entity 

and Display (paragraph 78); Statement of Federal Financial Accounting 

Standards (SFFAS) 5, Accounting for Liabilities of the Federal 

Government (inside front cover and Appendix A, paragraph 142); SFFAS 

8, Supplementary Stewardship Reporting (Introduction paragraph 40); 

and, SFFAS 24, Selected Standards for the Consolidated Financial Report 

of the United States Government (Appendix A, paragraph 20).

A5. Providing interim guidance on the application of standards issued by the 

FASB serves to proactively address entity concerns that moving the 

hierarchy of generally accepted accounting principles into the accounting 

literature without addressing the use of FASB GAAP would require a 

sudden and dramatic change in practice. 

Application to Legislative and Judicial Branches 

A6. The FASAB’s sponsors do not prescribe accounting standards for the 

legislative and judicial branches. The legislative and judicial branches, and 

most entities within those branches, are not currently required to prepare 

general purpose financial reports and those that do prepare statements are 

not subject to any requirements by the FASAB’s sponsors to follow FASAB 

GAAP or prepare a reconciliation between FASAB GAAP and FASB GAAP. 

However, as the source of GAAP for federal reporting entities, FASAB 

GAAP would be the appropriate accounting standards for these entities to 

adopt if they prepare GAAP-based general purpose financial reports. 

 

9

 FASAB News, Jan.-March 2000, p. 2. 
Appendix A: Basis for Conclusions 13

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Federal Accounting Standards Advisory Board 

The Hierarchy of Generally Accepted Accounting Principles, Including the Application of 

Standards Issued by the Financial Accounting Standards Board 

July 28, 2009 

Exposure Draft 

A7. The Board published the exposure draft (ED), The Hierarchy of Generally 

Accepted Accounting Principles for Federal Entities, Including the 

Application of Standards Issued by the Financial Accounting Standards 

Board, on December 2, 2008, with comments requested by February 3, 

2009. Upon release of the ED, notices and press releases were provided 

to: The Federal Register, FASAB News, The Journal of Accountancy, AGA 

Today, the CPA Journal, Government Executive, the CPA Letter, and 

Government Accounting and Auditing Update, The CFO Council, the 

Presidents Council on Integrity and Efficiency, Financial Statement Audit 

Network, and the Federal Financial Managers Council, and committees of 

professional associations generally commenting on EDs in the past. 

A8. This broad announcement was followed by direct mailings of the ED to the 

Subcommittee on Federal Financial Management, Government Information, 

and International Security, Committee on Homeland Security and 

Governmental Affairs, United States Senate; and the Subcommittee on 

Government Management, Organization, and Procurement, Committee on 

Oversight and Government Reform, House of Representatives. 

A9. The Board received 31 response letters from the following sources: 

FEDERAL 

(Internal) 

NON-FEDERAL 

(External) 

Users, 

academics, 

others 

 3 

Auditors 5 1 

Preparers 

and 

financial 

managers 

22 

Totals 27 4 

A10. The Board did not rely on the number in favor of or opposed to a given 

position. Information about the respondents’ majority view is provided only 

as a means of summarizing the comments. The Board considered the 

arguments in each response and weighed the merits of the points raised. 

The respondents’ comments are summarized below. 

A11. Respondents generally agreed that the hierarchy of GAAP that currently 

resides in the professional auditing literature should be incorporated into 
Appendix A: Basis for Conclusions 14

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Federal Accounting Standards Advisory Board 

The Hierarchy of Generally Accepted Accounting Principles, Including the Application of 

Standards Issued by the Financial Accounting Standards Board 

July 28, 2009 

the FASAB’s authoritative literature. Also, respondents generally agreed 

that: 1) general purpose financial reports prepared in conformity with 

accounting standards issued by the FASB should be regarded as being in 

conformity with GAAP for those federal entities that have in the past issued 

such reports, and 2) a federal reporting entity that is preparing GAAPbased general purpose financial reports for the first time should implement 

FASAB standards unless the entity clearly demonstrates that the needs of 

its primary users would be best met through the application of FASB 

standards. 

A12. However, some respondents believed it would be useful to clarify certain 

aspects of the Statement. Some respondents believed it would be useful 

to clarify where administrative directives (e.g. OMB, Government 

Accountability Office, and Department of the Treasury guidance) would be 

considered in the hierarchy. Some respondents questioned if “Other 

Accounting Literature” was a part of or separate from the hierarchy. 

A13. In addition, some respondents believed that those federal entities following 

FASB standards could be required to reconsider their practices. For 

example, if they receive federal appropriations, they should follow FASAB 

standards. 

Clarifying the GAAP Hierarchy and Other Accounting Literature 

A14. Paragraph 5 of the Statement presents the GAAP hierarchy for federal 

entities, and the Board expects practice to be governed by this hierarchy. 

The hierarchy presented in the ED referred to AICPA Statements of 

Position (SOP) and Practice Bulletins specifically made applicable to 

federal reporting entities and cleared by the FASAB. However, the FASB 

is codifying its accounting standards and SOPs and Practice Bulletins will 

generally be incorporated into the codification and have no continued 

authority. Because of this matter and because no SOPs and Practice 

Bulletins have been specifically made applicable to federal reporting 

entities and cleared by the FASAB, these sources were removed from the 

hierarchy. 

A15. In addition, while some respondents believed that it would be useful to 

discuss the location of administrative directives within the hierarchy, the 

FASAB believes that incorporating the GAAP hierarchy in the accounting 

standards should be accomplished expeditiously due to the AICPA’s 

planned removal of the hierarchy from the auditing standards. Since 

FASAB is unaware of any practice problems arising due to the absence of 

explicit guidance placing each type of administrative directive within the 
Appendix A: Basis for Conclusions 15

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Federal Accounting Standards Advisory Board 

The Hierarchy of Generally Accepted Accounting Principles, Including the Application of 

Standards Issued by the Financial Accounting Standards Board 

July 28, 2009 

hierarchy, immediate action on this request is not warranted.10 FASAB also 

notes that there are multiple sources of administrative directives, many 

types of directives, and varying processes for developing directives. 

Resolving placement for all administrative directives may require significant 

study. Therefore, the Board is acting to adopt the GAAP hierarchy 

essentially as it currently exists in the AICPA audit literature and does not 

intend to change current practices. 

A16. Paragraphs 6 and 7 of the Statement provide guidance to assist readers in 

understanding how the hierarchy should be considered when preparing 

general purpose financial reports in conformity with GAAP. 

A17. Paragraph 7 also discusses when to consider literature not discussed in 

the GAAP hierarchy - Other Accounting Literature. The phrase “Other 

Accounting Literature” is capitalized in the Statement and included under a 

separate heading to indicate its distinction from the GAAP literature. Other 

Accounting Literature is presented separately from the hierarchy because 

the items in this category do not establish GAAP and cannot amend 

existing FASAB standards, interpretations, technical bulletins or releases, 

or staff implementation guidance. Other Accounting Literature may only be 

relied upon by financial statement preparers and auditors to resolve 

specific accounting issues in the absence of literature in paragraph 5 of the 

Statement. 

A18. The Board also recognizes that other standards-setting bodies are 

currently considering codifying their pronouncements. As a result, listing 

the titles of specific pronouncements in Other Accounting Literature may 

cause difficulty in referencing those documents in the future. Thus, 

paragraph 8 of the Statement refers to pronouncements of other standardssetting bodies rather than listing specific pronouncements. 

 

Entities Following FASB GAAP 

A19. As noted above, the Board primarily intended to incorporate the GAAP 

hierarchy into the FASAB’s accounting literature and did not intend to 

change existing practices at this time. The Board is continuing a separate 

project on reporting by federal entities that primarily apply standards issued 

by the FASB. The project intends to determine whether certain federal 

 

10 This request will be considered when the Board reviews its technical agenda to select new projects. 
Appendix A: Basis for Conclusions 16

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Federal Accounting Standards Advisory Board 

The Hierarchy of Generally Accepted Accounting Principles, Including the Application of 

Standards Issued by the Financial Accounting Standards Board 

July 28, 2009 

entities should be permitted to continue following FASB GAAP and what 

additional reporting, if any, is needed for stand-alone financial reports of 

federal entities that are permitted to continue applying FASB accounting 

standards. 

A20. Paragraph 9 of the Statement states that those federal entities preparing 

general purpose financial reports in conformity with FASB accounting and 

reporting standards are permitted to continue current practices. The 

Statement does not preclude those entities from reconsidering those 

practices. 

Board Approval 

A21. This statement was approved for issuance by all members of the Board. 

The written ballots are available for public inspection at the FASAB's 

offices. 
Appendix B: Abbreviations 17

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Federal Accounting Standards Advisory Board 

The Hierarchy of Generally Accepted Accounting Principles, Including the Application of 

Standards Issued by the Financial Accounting Standards Board 

July 28, 2009 

Appendix B: Abbreviations 

AICPA American Institute of Certified Public Accountants 

FASAB Federal Accounting Standards Advisory Board 

FASB Financial Accounting Standards Board 

GAAP Generally Accepted Accounting Principles 

GAO Government Accountability Office 

GASB Governmental Accounting Standards Board 

IASB International Accounting Standards Board 

IPSASB International Public Sector Accounting Standards Board 

OMB Office of Management and Budget 

SAS Statement on Auditing Standards 

SFFAC Statement of Federal Financial Accounting Concepts
Appendix C: Glossary 18

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Federal Accounting Standards Advisory Board 

The Hierarchy of Generally Accepted Accounting Principles, Including the Application of 

Standards Issued by the Financial Accounting Standards Board 

July 28, 2009 

Appendix C: Glossary 

GAAP Hierarchy: the sources of accounting principles used in the preparation of 

general purpose financial reports of federal reporting entities that are presented in 

conformity with generally accepted accounting principles and the framework for 

selecting the principles. 
FASAB Board Members 

Tom L. Allen, Chair 

Congressional Budget Office 

Robert F. Dacey 

John A. Farrell 

Norwood J. Jackson, Jr. 

James M. Patton 

Nancy Fleetwood 

Alan H. Schumacher 

Harold I. Steinberg 

Danny Werfel 

FASAB Staff 

Wendy M. Payne, Executive Director 

Project Staff 

Ross Simms 

Julia Ranagan 

Federal Accounting Standards Advisory Board 

441 G Street NW, Suite 6814 

Mail Stop 6K17V 

Washington, DC 20548 

Telephone 202-512-7350 

FAX 202-512-7366 

www.fasab.gov