Final answer:
Financial sustainability is a financial concept defined by GASB. It refers to a government's ability to meet its financial obligations and service obligations over time. Governments with high levels of debt and budget deficits may struggle to achieve financial sustainability.
Step-by-step explanation:
The financial concept defined by GASB as 'the probability that a government will meet both its financial obligations to creditors, consumers, employees, taxpayers, suppliers, constituents, and others as they become due and its service obligation to constituents, both currently and in the future' is financial sustainability.
Financial sustainability refers to the ability of a government to effectively manage its finances and meet its obligations. It involves maintaining a balance between revenue and expenditure, ensuring long-term fiscal stability, and avoiding excessive debt.
For example, a government with a high level of debt and ongoing budget deficits may face challenges in achieving financial sustainability, as it may struggle to meet its obligations and maintain essential services.