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Differences in financial reporting: for-profit vs government

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What are the differences in financial reporting in a for-profit and government organization?

What are the similarities?

How do the differences and similarities affect the comparability of financial reports? Should these reports be comparable? Why or Why not?

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Solution Summary

The similarities and differences are discussed in the 487 word solution. It includes differences in standards of reporting, regulatory bodies, format of financial statements, and other information.

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The types of differences in financial reporting first speak to the differences in the entities themselves:

1. The absence of shareholders and a profit motive first distinguish a non profit from a for profit entity.
2. The accounting standards follow a different path.
3. The goals of the organization are much different.
4. Within the nonprofit group, there is a further subdivision by type of entity between NPOs and governmental entities.

The FASB and the GASB are parallel bodies promoting standards of reporting, and it is curious that NPOs (nongovernmental not for profit organizations) fall under the FASB rules rather than the GASB (Governmental Accounting Standards Board) rules. Even considering their basic differences, the intent is to have consistent reporting ...

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