What does GASB's classified format require?

The classified format required by the Governmental Accounting Standards Board (GASB) stipulates that entities clearly distinguish between current and non-current assets and liabilities. This means that organizations should separately present current assets, which are expected to be converted to cash or consumed within a fiscal year, alongside non-current assets that will provide economic benefits over a longer period. Similarly, current liabilities, which are obligations due within one year, must be distinguished from non-current liabilities that extend beyond that timeframe.

By following this structured approach, users of the financial statements, such as stakeholders, investors, and regulatory bodies, can better assess the liquidity, financial health, and overall stability of the governmental entity. This classification aids in providing a clearer picture of the government's financial position at a given point in time, which is crucial for facilitating informed decision-making.