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Concepts Statements – General Information

In May 1987 the GASB issued Concepts Statement No. 1, Objectives of Financial Reporting. In this Concepts Statement accountability was noted as being the cornerstone of all financial reporting in government. As part of identifying financial reporting objectives, the essential nature of providing information to assist users in assessing accountability and in making economic, social and political decisions was reaffirmed, and it was noted that accountability is the paramount objective from which all other objectives must flow.

In April 1994 the GASB issued Concepts Statement No. 2, Service Efforts and Accomplishments Reporting. This Concepts Statement focused on one of the objectives from GASB Concepts Statement No. 1, Objectives of Financial Reporting. It was the product of eight years of research concerning performance measurement and reporting by state and local governments.

One objective of Concepts Statement No. 1 states that "financial reporting should assist in fulfilling government's duty to be publicly accountable and should enable users to assess that accountability by:

  • Providing information to determine whether current-year revenues were sufficient to pay for current-year services,
  • Demonstrating whether resources were obtained and used in accordance with the entity's legally adopted budget, and demonstrating compliance with other finance-related legal or contractual requirements,
  • Providing information to assist users in assessing the service efforts, costs, and accomplishments of the governmental entity.Ē

The last of these three methods to achieving one objective of financial reporting is further developed in Concepts Statement No. 2, Service Efforts and Accomplishments Reporting which was amended in Concepts Statement No. 5, Service Efforts and Accomplishmets Reporting. The Statements include:

  • a discussion of the governmental environment and the need for SEA reporting, including a discussion on the nature of governmental accountability,
  • the elements of SEA reporting and related information,
  • the objectives and characteristics of SEA performance information,
  • the limitations of SEA performance information,
  • how to enhance its usefulness, and
  • the need for developing reporting guidance for SEA performance information.

Concepts Statement No. 2 asserts that information provided by governments should be intended (1) to assist in decision making and (2) to facilitate the process of decision making in the context of the public administration system and budgetary cycle. Therefore, ideally a governmental entity should:

  • establish and communicate clear, relevant goals and objectives,
  • set measurable targets for accomplishment, and
  • develop and report indicators that measure its progress in achieving those goals and objectives (measures of performance).

In November 2008 the GASB issued Concepts Statement No. 5, Service Efforts and Accomplishments Reporting, an amendment of GASB Concepts Statement No. 2. The amendments reflect developments that have occurred since Concepts Statement 2 was issued in 1994. The changes are based on the findings of extensive research by the GASB and others, as well as the results of the GASBís monitoring of state and local governments that have been reporting SEA performance information.

The amendment eliminated one section and modified four sections of Concepts Statement 2. The section of Concepts Statement 2 on Developing Reporting Standards for SEA Information has been deleted. The sections of Concepts Statement 2 on Purpose and Scope, The Elements of SEA Reporting and Related Information, Limitations of SEA Performance Information, and Enhancing the Usefulness of Reported SEA Performance Information have been modified. Conforming terminology changes were also made to other sections.


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In this section:

General Information
Concepts Statement No. 1
Concepts Statement No. 2
Concepts Statement No. 5
Elements of SEA Reporting
Qualitative Characteristics
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