GASB 34 is the designation for Statement No. 34, “Basic Financial Statements—and Management-Performance and Appraisal Information—of State and Local Governments,” issued by the Governmental Accounting Standards Board (GASB) in June 1999 and made effective for fiscal years beginning after December 15 1999. The pronouncement establishes the fundamental financial reporting model for U.S. state and local governmental entities, superseding earlier standards such as GASB 14 and GASB 23.
Purpose and Scope
The standard aims to improve the relevance, reliability, and usefulness of governmental financial reporting by:
- Requiring the preparation of government‑wide financial statements that present the overall financial position and results of operations of a government as a single economic entity, regardless of its fund structure.
- Defining a new measurement focus (the economic resources measurement focus) and basis of accounting (accrual accounting) for the government‑wide statements, while retaining the current and modified accrual bases for fund‑level statements.
- Mandating a set of required fund‑level financial statements, including a statement of net position, a statement of activities, a statement of cash flows, and a statement of changes in fund balances for each fund type.
- Introducing schedules and disclosures that provide information on capital assets, long‑term liabilities, and infrastructure, as well as a set of management‑performance indicators (e.g., service effort, performance measurement data).
Key Provisions
| Area | Requirement |
|---|---|
| Government‑wide statements | Presentation of a Statement of Net Position and a Statement of Activities for the entire governmental entity. |
| Fund statements | Presentation of a Statement of Net Position, Statement of Activities, and a Schedule of Revenues, Expenditures, and Fund Balances for each governmental fund (governmental, proprietary, and fiduciary). |
| Measurement focus and basis | Economic resources measurement focus and accrual basis for government‑wide statements; current or modified accrual basis for fund statements, as appropriate. |
| Capital assets and infrastructure | Reporting of capital assets, debt, and depreciation (or amortization) on the government‑wide statements; separate reporting of infrastructure assets using either the modified approach (maintenance of infrastructure) or the traditional depreciation approach. |
| Management‑performance and appraisal information | Inclusion of a required set of performance indicators (e.g., number of persons served, service effort, cost per unit of service) and a discussion of the entity’s management policies, plans, and results. |
| Notes and disclosures | Extensive narrative and quantitative disclosures regarding financial position, liabilities, revenue sources, pension and other post‑employment benefit obligations, and other relevant topics. |
Implementation and Impact
The adoption of GASB 34 represented a major shift in governmental accounting, moving many entities from a primarily fund‑based perspective to a dual‑reporting model that includes both fund‑level and government‑wide information. It required significant changes to accounting systems, internal controls, and financial‑statement preparation processes. Subsequent GASB pronouncements (e.g., GASB 67 and GASB 68, issued in 2012) expanded on the infrastructure reporting concepts introduced in GASB 34, while other statements refined the treatment of pension liabilities, revenue recognition, and other accounting areas.
Subsequent Developments
While GASB 34 remains a foundational component of governmental financial reporting, it has been supplemented by later standards that address specific accounting topics. The core requirements for government‑wide financial statements and the dual‑basis of accounting model, however, continue to be derived from GASB 34.
