FASAB

Also known as: Federal Accounting Standards Advisory Board

framework · accounting · regulatory-standard

Body of accounting standards governing US federal government financial reporting.

The Federal Accounting Standards Advisory Board issues generally accepted accounting principles for US federal government entities. FASAB was established in October 1990 by a memorandum of understanding among the Department of the Treasury, the Office of Management and Budget, and the Government Accountability Office (then called General Accounting Office). The AICPA recognized FASAB as the authoritative standard-setter for federal entities in 1999, completing its GAAP-setter status. FASAB issues Statements of Federal Financial Accounting Standards (SFFAS), Statements of Federal Financial Accounting Concepts (SFFAC), Interpretations, and Technical Bulletins. Federal accounting differs from both state/local (GASB) and corporate (FASB) frameworks because of the government's sovereign monetary authority, the budget-vs-financial-reporting distinction, and the existence of federal-specific concepts like 'social insurance' and 'stewardship' reporting (e.g., for natural resources, heritage assets, deferred maintenance).

Originators

Tri-agency MOU among Treasury, OMB, and GAO (1990); AICPA recognition as authoritative standard-setter (1999) high

Year / Decade

1990 (FASAB established); 1999 (AICPA recognition); ongoing high

Primary sources

FASAB. SFFAS 1 through current series (continuously updated), Department of the Treasury, OMB, and GAO (1990). Memorandum of Understanding establishing FASAB, GAO. Annual Financial Report of the US Government (audit opinions) high

Core components

Statements of Federal Financial Accounting Standards (SFFAS, binding GAAP)
Statements of Federal Financial Accounting Concepts (SFFAC)
Required Supplementary Information (RSI) and Required Supplementary Stewardship Information (RSSI)
Treatment of social insurance programs (e.g., Social Security, Medicare) — long contested between liability-recognition and disclosure-only approaches
Stewardship reporting for heritage assets, stewardship land, and stewardship investments
Reconciliation between budgetary and financial-reporting bases

Primary use case

Annual financial reporting by federal departments and agencies; basis for the consolidated Financial Report of the US Government; input to federal program evaluation, congressional oversight, and GAO audit; compliance reference for federal CFOs under the CFO Act of 1990 and FFMIA.

Common criticisms

Treatment of social insurance has been the most-contested FASAB issue: SFFAS 17 and SFFAS 37 require disclosure rather than balance-sheet recognition of Social Security and Medicare projected obligations, a position critics argue understates the federal fiscal position by trillions of dollars (see academic and CBO debates from 2007 onward)
the consolidated Financial Report of the US Government has consistently received GAO disclaimers of opinion driven by Department of Defense auditability problems and intragovernmental balance reconciliation, calling into question the practical usability of FASAB compliance
budgetary-vs-financial-reporting reconciliation produces substantial complexity with limited user demand outside specialist analysts
FASAB's tri-agency governance includes the very preparers it standards-sets for, raising independence concerns relative to FASB's structurally more independent governance
relatively few external users rely on federal financial statements compared to budget documents, weakening the user-decision-usefulness justification for the framework.

Lineage

Siblings: US GAAP, GASB, IPSAS, Fund Accounting, Yellow Book