When was GASB Statement No. 56 initiated?

School: Academy of Healing Arts Massage and Facial Skin Care           Price: $20.00 USD

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o make sure you are up to date on the special guidelines the GASB has declared, your manager asked you to research GASB Statement No. 56. He also asked you to show him, side by side, how government accounting journal entries might differ from for-profit journal entries in these similar events.

Write 500–750 words that addresses the following:
When was GASB Statement No. 56 initiated?
In your own words, what is the essence of the new ruling?
Why did the GASB probably deem it as being necessary?
How might GASB Statement No. 56 change the activities of any accountant performing governmental accounting?
Create journal entries for all of the following situations.
On 10/1/2010, a for-profit Company A provides $100,000 of service to Company B. Company B plans to pay their bill 90 days later.
Create the journal entry when the service is provided.
Create the journal entry when the cash is received.

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Academy of Healing Arts Massage and Facial Skin Care
Solution:* When was GASB Statement No. 56 initiated?The Governmental Accounting Standards Board (GASB) issued the statement No. 56 on April16, 2009 and effective from March 2009. The statement No.56 incorporates accounting andfinancial reporting guidance that previously only contained in AICPA.* In your own words, what is the essence of the new ruling?The essence of the new ruling is that the statement addresses three issues from the literature ofAICPA - going concern considerations, related party transactions and subsequent events. Thestatement is part of the effort of GASB to codify all generally accepted accounting principles forboth state and local governments so they can derive from one source. It helps accountants toidentify and apply accounting guidance which are relevant.By consolidating this GAAP for local and state governments into single codification, the boardmaking the process of identifying relevant literature much easy and less time consuming whileimproving the consistency of applying the literature.Related Parties Transactions:State and local governments are required to disclose certain related parties transactions. If aparticular transaction substan
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