Textbook Problem

What is the Conceptual Framework of the FASB?

To determine

Provide the conceptual framework of the FASB.

Explanation of Solution

Financial Accounting Standards Board (FASB):

The Financial Accounting standards Board (FASB) is the primary standard-setting body in the Country U. It is responsible for establishing Generally Accepted Accounting Principles (GAAP), which acts as a guide at the time of preparation of financial statements by enterprises.

• The main intent of the conceptual framework of the FASB is to establish objectives and fundamental concepts so as to help in development of the financial accounting and their reporting guidance.
• The conceptual framework of FASB has laid foundation of objectives, concepts, principles and definitions which helps in leading a high –quality financial accounting standards and the appropriate application of those standards in accounting practice.
• The objectives serve as a guideline in accomplishing the goals and purpose of the financial reporting. The underlying  concepts  of the financial accounting  guides in selection  of the transaction and events that are to be accounted for, their recognition and measurements and the means of summarizing and  communicating  the given  information  to the financial  statement  users.