Financial Accounting Standards Board Wikipedia

• Thiago Eleocadio
• 5 de fevereiro de 2020
• Forex Trading
• 0 Comments

The SEC had endorsed the Wheat Study Group recommendations, and in December 1973 gave the FASB its imprimatur in Accounting Series Release (ASR) No. 150. The SEC stated that, based on the evidence of private sector support for the FASB, it would continue to look to the private sector to establish and improve accounting principles. The reason for the low level of output from the APB was that its members operated on only a part-time basis.

Standard-setting prior to the creation of the FASB

S-Ox was a watershed moment for accounting standard setting by statutorily acknowledging the arrangement between the SEC and the private sector. The FASB easily met the specified criteria in S-Ox for an accounting standard setter’s work product to be recognized as generally accepted by the SEC; the SEC reaffirmed the FASB as a designated private-sector standard setter in April 2003. The Accounting Principles Board (APB) was the former authoritative body of the American Institute of Certified Public Accountants (AICPA) formed in 1959. Some of the opinions released by the APB still stand as part of the Generally Accepted Accounting Principles (GAAP), but most have been either amended or entirely superseded by FASB statements. By the early 1970s, it was clear that a more structured and efficient in 1973 fasb was replaced with standard-setting process was needed to address the growing complexity of accounting issues.

Many of the APB’s publications were subsequently superseded by FASB Statements and Interpretations, although some continue to be referenced in today’s accounting literature. The FASB was formed in 1973 to succeed the Accounting Principles Board and carry on its mission. Accounting standards are essential in the financial world, as they provide a framework for accurate and consistent financial reporting. Over the years, accounting standards have evolved to meet the ever-changing needs of the business environment. One of the key players in the development of accounting standards in the United States was the Accounting Principles Board (APB). This article will explore the history of the APB, its contributions to accounting standards, and the impact it has had on the accounting profession.

For example, its Emerging Issues Task Force (EITF) develops consensus positions on accounting matters that demand prompt solutions. EITF materials and other FASB publications can be ordered by individual item or through a variety of subscription programs that the organization offers. Special discounts on publications are available to parties who make voluntary contributions to support the overall work of the FASB.

Derivative accounting

The SEC requires compliance with FASB standards by all public companies, that is, those whose securities are traded in public markets, either on stock exchanges or over-the-counter. The AICPA requires public accounting firms that audit either public or private companies to express an opinion as to whether those companies’ financial statements conform with GAAPs. For example, pronouncements on topics such as accounting for employee stock options, postretirement health care benefits, and derivative financial instruments were strongly opposed by many corporations and other affected parties. But in the final analysis, the FASB endeavors to act in the public interest by issuing accounting standards that will result in the most informative and unbiased financial statements possible. Thus investors, creditors, and all others who use financial statements in making economic decisions can take comfort in the fact that the FASB puts the general public interest above any concerns of individual corporations or other self-interested parties. The Financial Accounting Standards Board has the authority to establish and interpret generally accepted accounting principles (GAAP) in the United States for public and private companies and nonprofit organizations.

1. It is also possible for the discussion memorandum and public hearings to be eliminated entirely.
2. These publications were aimed at providing guidance and establishing standards on various accounting issues.
3. The APB was created by the American Institute of Certified Public Accountants (AICPA), which was concerned about the lack of standardization and consistency in accounting practices at the time.
4. GAAP and the International Financial Reporting Standards (IFRS), known as the IASB-FASB convergence project.15 The scope of the overall IASB-FASB convergence project has evolved over time.
5. This has freed the FAF from its fundraising efforts and helped further assure the Board’s independence from the preparer and audit communities.

AICPA’s GAAP agreement

The FASB monitors the application of a Statement to ensure that it is working as planned. Should the standard not work in practice, then the board may consider amending it to provide clarification, issuing additional interpretive guidance, or taking some other action to address problems that arise. While the Codification does not change GAAP, it introduces a new structure—one that is organized in an easily accessible, user-friendly online research system.

1. The Financial Accounting Standards Board (FASB) publishes and maintains the Accounting Standards Codification (ASC), which is the single source of authoritative nongovernmental U.S.
2. The CAP, which had been in existence since 1939, was dissolved due to concerns about its lack of formal standard-setting procedures and the perceived need for a more authoritative body to govern accounting principles.
3. Accordingly, any views so expressed are those of the author and do not necessarily reflect the views of the Standards Board.) may be shortened to as few as 30 days when the Board believes that sufficient information is available to enable it to proceed quickly.
4. In response, the AICPA established the Wheat Committee in 1971 to study the existing standard-setting process and recommend changes.
5. The Codification is effective for interim and annual periods ending after September 15, 2009.

Neutrality means that accounting standards should be designed to provide the best possible information for economic decision making without regard to how that information may affect economic, political, or social behavior. Put another way, accounting standards should not be intentionally biased for the purpose of promoting either private special interests or government policy goals. Neutrality has been reinforced by adoption and adherence to a broad set of principles called the conceptual framework. That framework was designed to produce standards that result in neutral information that is useful in decision making. No longer would the accounting standard setter consist of volunteers with full-time jobs in private practice or industry.

Accounting issues

The output of the APB was relatively small for an organization that operated for 14 years, with only 31 opinions and four statements issued during that time. However, some of this material proved to be influential in shaping later accounting standards, and some of the opinions remain partially in force. Examples of opinions that are still used deal with the content and structure of the financial statements, such as the consolidation of financial statements, the treatment of debt, and interim financial reporting. While accounting standard setting remained in the private sector, the FASB’s establishment continued the steady erosion of the public accounting community’s influence over the process and the results.

However, the accountants continued to provide substantial financial and human resources to the Board. Prior to the Sarbanes-Oxley Act of 2002 (S-Ox), FASB financing was from sales of publications and contributions, with a majority of contributions coming from public accountants, substantial amounts from preparers, but just a pittance from users. Similarly, through mid-2012, 18 of the 43 Board members and all but one chairman had come directly from public accounting firms. The FASB has the authority to establish GAAPs but has no authority to enforce its standards.

Generally Accepted Accounting Principles (GAAP)a is the accounting standard adopted by the U.S. Securities and Exchange Commission (SEC),1 and is the default accounting standard used by companies based in the United States. However, it appears that the APB could not keep pace with the growing complexity of transactional activity that required financial reporting. In accounting history to participate in the FASB’s “due process” and to indicate the sources that will be useful for an inquiry into the work of the FASB. By bringing his analytics to bear upon problems currently under consideration, the accounting historian may provide a rather unique input to the Board.

These publications were aimed at providing guidance and establishing standards on various accounting issues. The APB’s work focused on topics such as revenue recognition, inventory valuation, lease accounting, and pensions. Some of the most significant APB publications include ARB No. 43, which provided guidance on inventory valuation, and APB Opinion No. 17, which addressed accounting for leases. The APB was created by the American Institute of Certified Public Accountants (AICPA), which was concerned about the lack of standardization and consistency in accounting practices at the time. The AICPA sought to bring greater uniformity to the field by creating a body that would establish authoritative accounting principles.