GASB and FASB - a comparison

Core TSIs : Lease Accounting : Working with GASB lease accounting : GASB and FASB - a comparison

Both the GASB and the FASB are focused on ensuring that accounting and financial reporting activities are precise and reliable, and the resulting financial reports are accurate and beneficial to the end users. However, GASB and FASB are considerably different in terms of scope and applicability of their objectives.

This table states the list of differences between GASB and FASB accounting standards.

GASB	FASB
The scope of GASB is to set standards for state and local government entities.	The scope of FASB is to help investors and creditors make decisions about private sector companies.
There is no operating lease classification in GASB. Hence, all leases are reported as finance leases.	In FASB, operating and finance leases distinction is maintained. Hence, all operating leases are capitalized in the balance sheet.
Lease payments are classified as capital/finance lease in GASB.	Lease payments are classified as operating lease in FASB.
Lease liabilities are reported as long-term debt in GASB. So, this may impact debt contracts and ratios.	For FASB, operating lease liabilities are counted as operating payables rather than as debt. So, debt contracts and ratios are not impacted.
Unpaid interest must be accrued until it can be paid. A separate liability is reported for accrued interest. Prior to making lease payments, accrued interest must be paid.	For FASB, interest is not accrued.