What does SFFAS 34 establish?

SFFAS 34, or Statement of Federal Financial Accounting Standards No. 34, specifically establishes principles related to the financial presentation and accountability of federal agencies, particularly concerning the disclosure of financial information. It outlines a comprehensive framework for federal financial reporting, which encompasses the hierarchy of Generally Accepted Accounting Principles (GAAP) as applicable to federal government entities.

This means that SFFAS 34 plays a critical role in ensuring that the accounting principles guiding federal financial statements are clear and standardized. By delineating the hierarchy, it helps ensure that federal financial statements adhere to sound accounting practices, thus enhancing their reliability and utility for stakeholders.

The other options represent important components of governmental financial operations but do not directly define the essence of SFFAS 34 in terms of establishing a clear hierarchy of accounting principles specific to federal financial reporting.