Which organization establishes accounting standards for the private sector, including non-profit entities?

The Financial Accounting Standards Board (FASB) is the organization responsible for establishing accounting standards for the private sector, including non-profit entities, in the United States. FASB is recognized for developing generally accepted accounting principles (GAAP) that govern financial reporting. These standards are critical as they provide a framework for consistency and comparability in financial statements, helping stakeholders understand an organization’s financial position and performance.

FASB plays a pivotal role in shaping the landscape of accounting, ensuring that financial information is presented in a fair and transparent manner. This is essential not just for for-profit organizations but also for non-profits, which require clear and standardized reporting to maintain trust with donors, grantmakers, and the public.

While other organizations also contribute to the field of accounting—such as the Governmental Accounting Standards Board (GASB), which focuses on state and local governments; the International Accounting Standards Board (IASB), which develops international financial reporting standards; and the American Institute of CPAs (AICPA), which supports accounting professionals and sets audit standards—FASB specifically addresses the needs of the private sector and non-profit entities within the U.S. context.