What GASB statement governs fund classifications in governmental accounting?

GASB Statement No. 54 specifically addresses the issue of fund classifications in governmental accounting. This statement provides clarity on how to categorize and report different types of funds, emphasizing the importance of understanding both the financial and operational aspects of these funds to ensure proper reporting. It establishes a framework that helps distinguish among governmental funds, proprietary funds, and fiduciary funds, which is crucial for expressing the financial position and changes in financial position of a government entity. By setting these classifications, GASB 54 enhances transparency and comparability in governmental accounting, allowing stakeholders to better understand how resources are allocated and managed.