GAO Glossary of Terms and Definitions (September 2005)

Proprietary Accounting

Involves federal entities recording and accumulating financial information on transactions and balances for purposes of reporting both internally to management and externally in an entity’s financial statements. “Proprietary accounting” is also referred to as “financial accounting” and is usually based on generally accepted accounting principles (GAAP), which follow established conventions, such as the recognition of the depreciation of capital assets over time as expenses, instead of recognition on the basis of strict association with the obligation or expenditure of appropriated funds. Most federal entities are subject to proprietary accounting standards promulgated through the Federal Accounting Standards Advisory Board (FASAB). (For a discussion of the methods for tracking funds in the federal government, see app. IIISee also Federal Accounting Standards Advisory Board).

[PAGE 81]






Proprietary Accounts