Fasb

The FASB is an agency of the federal government that has the broad powers to prescribe accounting standards to be employed by companies that fall within its jurisdiction.

The FASB Accounting Standards Codification® is the source of authoritative generally accepted accounting principles (GAAP) recognized by the FASB to be applied to nongovernmental entities.

The Financial Accounting Standards Board (FASB) sets the Generally Accepted Accounting Principles in the United States. The FASB Accounting Standards codification implements a system for organizing non-governmental generally accepted

It was made to be fair and unbiased for the accounting world. SEC fully supports the FASB and they are still operating in present. They dwell in Norwalk, Connecticut to be close to NYC where most of the big corporations are. The first major move is they released a Statement of Financial Accounting Standard in 1975. It is a framework with policies that the corporations have to follow. This framework prefers to see “the assets and liability view” than the “revenue and expense view” They were not pleased with the matching principle that was created by AAA in 1940. Also in SFAS they included marketable securities that requires to reporting in unrealized holding gains and losses. In 1979, they included reporting on capitalized on interest cost and the proper way to create FMV (revised in 1995 to prevent false information). In 1981, they solved the issue with foreign currency exchange. In 1987, they have created a cash flow method with two options; direct and indirect. In 1990, they revised the policy to include post-retirement and health care as liability. In 1995, Employee stock options are included and 1997 Comprehensive income is included. In 2002, the Goodwill and other intangibles are now reported. Also in 2002 after Enron collapse was they formed Sarbanes-Oxley Act. Now ISAB and FASB worked jointly to converge GAAP and

The mission of the FASB is to “establish and improve standards of financial accounting and reporting that foster financial reporting by nongovernmental entities that provides decision useful information to investors and other users of financial reports (FASB 2014).” The FASB is also an independent organization that is different from any other business and professional organization. The FASB has seven members, and they serve full time. They are appointed for five year terms, and are eligible for an additional five year term. The FASB uses due process to implement the process of the standard setting process. The rules for setting or changing standards include; identifying financial reporting issues from stakeholders or other sources, and then the FASB decides whether or not to add the issue to the agenda. Once that is done the boards deliberates at one or more public meetings, and an Exposure Draft is issued for stakeholder input. The FASB staff then analyzes letters, discussions, and any other information received which the Board will redeliberate on the proposed provision at one or more public meeting, and then the Board will issue the standard update. The FASB uses what is called a cost benefit analysis which is a process for calculating and comparing the benefit cost to the proposed policy (FASB, 2014).

GAAP is a very important concept in regards to financial statements. GAAP provides a uniform means of evaluating company performance. GAAP also provides clear metrics in which all publically traded companies must follow. These standards are designed to help protect society, investors, and stakeholders for fraudulent activities that may endanger the well being of society. Although GAAP has been met with extreme criticism of late, it does help abate the influence of fraudulent activity on the part of corporations. More importantly, GAAP is flexible in regards to its standards. The rules and procedures for reporting under GAAP are complex and have developed over an extended timeframe. Currently there are more than 150 "pronouncements" as to how to account for different types of transactions, ranging from how to report regular income from the sale of goods, and its related inventory values, to accounting for stock bonuses. This flexibility combined with standard proceeds helps to maintain the integrity of financial statements. This allows investors and other stakeholders to evaluate companies in a similar manner irrespective of size. A company with $2 billion in annual revenue can be evaluated in a similar manner to that of a company earning $500,000.

The Financial Accounting Standards Board is board of seven independent members who are accounting professionals that was developed in 1973. This seven member group is responsible for communicating the standards that are in place for financial accounting and reporting that takes place in the United States. Generally accepted accounting principles (GAAP) are the standards that are used by the FASB to govern the way in which corporations prepare their financial reports. This process of utilizing these standards to maintain and report accounting files is the only method that the US Securities and Exchange Commission will accept. The members include; Michael Crooch, CPA, George Batavick, CPA, Edward Trott, CPA, Leslie Seidman, CPA, Donald

To address the increasing challenges of legislating those governs our society today, “countries all over the world have begun to outsource rulemaking to bodies consisting of people familiar with the subject. For that reason, policymakers rely on private entities to establish financial accounting and reporting standards” (Donald Kieso, 2003, Intermediate Accounting). The two most influential standard-setters are the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB).

The purpose of the Financial Accounting Standards Board (FASB) is to create and improve the standards of financial accounting and reporting for nongovernmental entities. It is a standard for not for profit financial reporting which provides useful information to investors and other users of financial reports. The Accounting Standards Update 2011-5 discusses the reporting and presentation of comprehensive income and its components in a full set of general purpose financial statements.

In contrast the US structure is a fragment more complex than that of the UK. To understand accounting standard setting in the US, one must start with the SEC (Securities and Exchange Commission) which is a regulatory agency established in 1934 by the congress. Previous to this no national system existed to govern the data flow of communication to investors. SEC has been given the statutory power to promulgate accounting principles. Even though it consists of its own policy, it does rely on the private sector in the US to establish financial reporting standards. Its role of standard setting on financial reporting and accountancy principle guidelines is backed with its powerful influence. Another standard setting board is the FSAB with its role to expand accounting standards outside the profession by encouraging. As a result the main source for accounting standards in the US internally is GAAP (Generally Accepted Accounting Principles) which is mounded by authority's pronouncement by the FASB (Financial Accounting Standards Board). The role of the FSAB is to set up financial accounting and reporting standards in the US. The FSAB structure is very significant around the world today as the "IASC's framework and UK statement of principles are clearly

Financial Accounting Standards Board (FASB) is a seven member board that consists of accounting professionals who establishes and communicates financial accounting and reporting standards known as generally accepted accounting principles (GAAP) in United States. The standards’ quest is to govern the preparation of the corporate financial reports and hence ensuring transparency, credibility and understandability of the financial statements. To achieve these, there is need to set guidelines that create uniformity in the preparation of the statements across the region. In this paper, we will focus on the

Financial accounting has become more complex as our country grows. The United States has established a core financial body to ensure all financial statements are published within the prescribed guidelines so that any creditor or investor is able to read and understand the information. The FASB was created to ensure that these guidelines are followed and they are well-paid individuals so there is little chance of them keeping ties with their private firms which creates a trust with the public. The FASB crated a conceptual framework that all companies must adhere to. This ensures that investors, creditors and the public receive an honest

Authoritative US GAAP is primarily developed and maintained by the FASB and the Emerging Issues Task Force.

Generally Accepted Accounting Principles (GAAP) are the various methods, rules, practices, and other procedures that have evolved over time in response to the need to regulate the preparation of financial statements. They are primarily set by the Financial Accounting Standards Board (FASB), a private sector entity with representatives from companies that issue financial statements, accounting firms that audit those statements, and users of financial information. Other bodies that contribute to

When the FASB was created it had a mission statement “to establish and improve standards of financial accounting and reporting that foster financial reporting by nongovernmental entities that provides decision-useful information to investors and other users of financial reports” (James, 2012). FABS was created as the financial accounting and reporting rules for both private and public companies. However, since financial reporting was so complex, there were other accounting organizations within FASB that stepped in to assist with creating different accounting policies and procedures for financial reporting.