Governmental and nonprofit accounting standards-setters tend to take a longer-term perspective in developing accounting measurements for certain of their transactions because they rarely go out of business.

Question

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Governmental accounting standards-setters tend to take a longer-term perspective in developing accounting measurements for governments because governments rarely go out of business because of their power to tax and the types of services that governments provide. Nonprofits, however, are at risk of going out of business for many reasons, such as competition, inefficiencies, and changes in constituent needs.

Governmental and Nonprofit Accounting Standards-Setters Tend to Take a Longer-Term