Investigating the effective factors for improving the financial reporting model for governmental funds

The reporting model for governmental funds has always been of particular importance. The Governmental Accounting Standards Board (GASB) has been actively engaged in the process of making improvements to the financial reporting model to provide more useful information to the users of the financial reports of governmental entities. The GASB proposed three recognition approaches to replace the current financial resources reporting model for governmental funds. The three approaches vary along a time dimension. The ‘‘near-term’’ model is the most similar to the current model with a specified reporting period of 60–90 days. A ‘‘short-term’’ model extends the transaction reporting to be the government’s one-year operating cycle. Finally, a ‘‘long-term’’ model would report both current and noncurrent assets and liabilities for governmental funds. This article, based on research by Marshall et al., raises questions about improving the reporting model for governmental funds, and finally provides recommendations.