How does GASB require operating revenues and operating expenses to be displayed?

GASB, or the Governmental Accounting Standards Board, mandates that operating revenues and operating expenses be displayed separately from non-operating revenues and expenses. This requirement is focused on enhancing the clarity and usefulness of financial statements for users looking to assess the performance and financial position of governmental entities. By separating these items, stakeholders can better understand the core activities that generate revenue and incur expenses, distinct from those that arise from non-routine or ancillary activities, which may not reflect the entity's primary mission.

This separation assists analysts and decision-makers in evaluating operational efficiency and determining how well the entity is managing its resources in essential service delivery. Such distinctions in reporting are crucial for transparency and allow for more effective comparison across governmental entities.