Evolution and current state of financial accounting concepts and standards in the nonbusiness sector

              The Accounting Historians Journal Vol. 12, No. 1 Spring 1985
Raymond E. Figlewicz SOUTHERN ILLINOIS UNIVERSITY, CARBONDALE
Donald T. Anderson SOUTHERN ILLINOIS UNIVERSITY, CARBONDALE
AND
C. David Strupeck UNIVERSITY OF NOTRE DAME
THE EVOLUTION AND CURRENT STATE OF FINANCIAL ACCOUNTING CONCEPTS AND STANDARDS IN THE NONBUSINESS SECTOR
Abstract: This article presents a condensed history of significant post 1900 de-velopments in nonbusiness financial accounting practices and standards, and highlights some of the major issues in the recent increase in interest and activity in nonbusiness accounting. It includes consideration of federal, state, and local government units along with various types of nongovernmental nonbusiness en-tities. The initial section of the article traces both the development of fund ac-counting techniques and the discovery of their inadequacies. Next, the article discusses developments in standard-setting and the search for a sound theoretical foundation. Finally, it presents a current profile of nonbusiness accounting. The article implies that nonbusiness accounting can no longer be treated as a sec-ondary consideration. The nonbusiness sector is a major component of the en-vironment that requires sound financial accounting and reporting standards and practices.
Introduction
During the past decade there has been an accelerating intensity in the study of accounting and financial reporting standards for not-for-profit entities. The current interest represents a change from the past when (1) only secondary importance was accorded these entities by financial accounting standard-setting bodies, and (2) standard-setting for such entities was completely separate from standard-setting for profit oriented entities. These changes came naturally as larger amounts of resources were channeled to not-for-profit entities.
This article contains three sections. The first part provides a gen-eral overview of the post 1900 evolution in not-for-profit financial