Overview of The New Blue Book: GAAFR 2001.

• Author: Freeman, Robert J.
• Position: Governmental Accounting Standards Board's new Blue Book

GAAFR 2001--the new Blue Book--is a definitive guidance masterpiece. This 680-page multi-purpose all-in-one book of timely, understandable, comprehensive, and practical guidance is the "must have" book for governmental accounting, reporting, and auditing professionals. This article reviews the new Blue Book and highlights sections of particular interest to practitioners.

It is likely that your office library is already stocked with up-to-date Governmental Accounting Standards Board (GASB) [1] guidance--including the latest Codification and Original Pronouncements volumes--as well as several contemporary governmental accounting textbooks. So why should a busy government finance officer, auditor, or consultant purchase yet another governmental accounting, financial reporting, and auditing book?

Governmental Accounting, Auditing, and Financial Reporting: Using the GASB Statement No. 34 Model [2] is not "just another book." To the contrary, GAAFR 2001--the new Blue Book--is a definitive guidance masterpiece. This 680-page multi-purpose, all-in-one book of timely, concise, understandable, comprehensive, and practical guidance--what to do and how to do it--is the must have book for governmental accounting, reporting, and auditing practitioners.

What makes the new Blue Book so special? Consider the structure and content--which are summarized in Exhibit 1. Even a cursory review of Exhibit 1 indicates some of the new Blue Book's features. For example, it is:

* comprehensive--and includes guidance on budgeting, budgetary reporting, internal controls, and auditing as well as on governmental accounting and financial reporting;

* illustrative-including a series of illustrative examples, a glossary, and summary appendices;

* accessible--because it has both a comprehensive general index to its contents, including journal entries and financial statements and a detailed table of contents; and

* useful--including practical "how to" guidance on implementing GASB Statement No. 34 and preparing the GASB Statement No. 34 based comprehensive annual financial report (CAFR).

Moreover, GAAFR 2001 is written for both the novice and the experienced practitioner. The experienced practitioner can quickly review the "Introduction" and "Fund Accounting" sections--noting the key changes under GASB Statement No. 34--whereas the earlier sections are a tutorial for the newcomer. All readers will ultimately focus extensively on the "Financial Reporting" section and the related "Appendices" illustrative examples, and most will at least scan the "Budgeting" and "Internal Controls and Auditing" sections.

Introduction

These first four chapters are designed primarily for the newcomer but provide an excellent review and update for the more experienced reader. They can be studied carefully one-by-one or reviewed rapidly as a four-chapter section.

* 1--GAAP and the Governmental Environment--emphasizes the unique environment of state and local governments (SLGs), how the SLG environment led to correspondingly unique accounting and financial reporting principles and standards, how generally accepted accounting principles (GAAP) applicable to SLGs are established, and the SLG GAAP hierarchy.

* 2--The Governmental Financial Reporting Model--briefly reviews the developments of fund accounting and reporting; the types of funds used, including their measurement focus and basis of accounting (MFBA); the evolution of the new integrated financial reporting model that includes government-wide statements as well as fund statements; and the interrelationships between the fund financial statements and government-wide financial statements.

* 3--Classification and Terminology--provides a summary overview of the several classes of SLG transactions (including nonexchange transactions) and interfund activity--and their appropriate accounting and reporting--as well as some of the specialized categories used in SLG financial...