Question

What is FASB ocdification? Explain in detail.

Answer 1

The Financial Accounting Standards Board (FASB) is a private, non-profit organization standard setting body whose primary purpose is to establish and improve Generally Accepted Accounting Principles (GAAP) within the United States in the public's interest. The Securities and Exchange Commission (SEC) designated the FASB as the organization responsible for setting accounting standards for public companies in the US. The FASB replaced the American Institute of Certified Public Accountants' (AICPA) Accounting Principles Board (APB) on July 1, 1973.

The FASB's mission is to “establish and improve financial accounting and reporting standards to provide useful information to investors and other users of financial reports and educate stakeholders on how to most effectively understand and implement those standards.” The FASB carries out its mission through improving the usefulness of financial reporting, focusing on the faithful representation and relevance of financial information, including the enhancing characteristics of useful information, comparability, timeliness, understandability, and verifiability. The FASB also accomplishes their mission through educating and guiding auditors, preparers, and other users of financial statements, ensuring current standards reflect developments in methods of doing business and economic environment changes, and by acknowledging areas of insufficiency in financial reporting that could be improved through the standard setting process.

FASB accounting standards are accepted as authoritative by many organizations, including state Boards of Accountancy and the American Institute of CPAs (AICPA).

The FASB is based in Norwalk, Connecticut, and is led by seven full-time Board members, one being the chairman, appointed by the Financial Accounting Foundation (FAF) to serve five-year terms and are eligible for one term reappointment.

The qualifications to serve on the FASB Board include professional competence and realistic experience from professions like financial reporting, investment services, and financial planning. Board members also come from sectors such as academia, business, and legal, or government agencies.

FASB Board members, as of 30 April 2018:

Member	Professional Background	Term Expiration
Russell Golden, Chairman	Public Accounting	2nd term expires in 2020
James Kroeker, Vice Chairman	Public Accounting/SEC	2nd term expires in 2024
Christine Botosan	Academic	1st term expires in 2021
Marsha Hunt	Public Accounting	1st term expires in 2022
Harold Monk, Jr.	Private Company Auditor	1st term expires in 2022
R. Harold Schroeder	Financial Statement User	2nd term expires in 2021
Marc Siegel	Financial Statement User	2nd term expires in 2018

The board is supported by more than 60 staff with backgrounds in public accounting, industry, academia, and government.

Funding

Subscription and Publication revenue includes sales and licensing of copyrighted FASB-related materials. The Financial Accounting Foundation (FAF) licenses the content of the FASB Codification to commercial publishers and other licensees for inclusion in their proprietary online research systems. The FASB Codification materials also are available through various paid subscription plans and hard copy printed versions

BACK GROUND

Marshall Armstrong, then-president of the American Institute of Certified Public Accountants (AICPA), appointed a group of seven men (the Wheat Committee) in the early 1970s to examine the organization and operation of the Accounting Principles Board, in order to determine what adjustments were needed to facilitate more accurate and timely results.Their findings, “Report of the Study on the Establishment of Accounting Principles”, were published in March 1972, and proposed several changes including establishing the Financial Accounting Foundation, separate from other professional firms, that would be overseen by the Board of Trustees. The FASB was conceived as a full-time body to ensure that Board member deliberations encourage broad participation, objectively consider all stakeholder views, and are not influenced or directed by political/private interests. The Wheat Report also recommended developing the “Financial Accounting Standards Advisory Council, a 20-member advisory council that members serve an initial 1-year term, that could be renewed indefinitely, and to explicitly define the FASB research projects, to ensure timely and appropriate results