FASB and Standard Setting Flashcards Preview

My FAR study cards > FASB and Standard Setting > Flashcards

Flashcards in FASB and Standard Setting Deck (14):
1

What does GAAP address?

Recognition, Measurement, Disclosure

2

Meaning of Recognition?

An item is recorded in an account and ultimately affects the financial statements

3

Meaning of measurement?

Concerns the dollar amount assigned to an item

4

Meaning of Disclosure?

Many unrecognized amounts are reported in the footnotes to complete the portrayal of the firm's financial position and performance

5

GAAp requires that many assets be reported at what amount?

At their historical cost, rather than at current market value

6

Who is FASB?

FASB is currently the standard-setting body in the United States

7

Who is SEC?

The federal government agency that administers the securities laws of the United States. They inforce GAAP

8

What is the AICPA?

The national professional organization for practicing CPAs

9

What are the three current Accounting Standard-setting mechanisms/groups in the US?

FAF, FASB and FASAC

10

What does FAF do?

Appoints the members of the FASB and its advisory councils, ensures adequate funding for the FASB, and exercises oversight over the FASB.

11

What does FASB do?

Establishes financial accounting standards for business entities

12

What does FASAC (Fin Acctg Standards Advisory) do?

Provides guidance on major policy issues, project priorities, and the formation of task forces

13

What process does FASB follow when issuing an Accounting Standard?

1. Considers whether to add a project to its agenda
2. Conducts research on the topic
3. Holds public hearings on the topic
4. Evaluates the research and comments
5. Solicits additional comments
6. Finalizes the new accounting guidance and approves with a majority vote
7. Issues an Accounting Standards Update (ASU)

14

What does GAAP (Accounting Standards) enforce?

Nothing, they are not laws or determined by legislatures but rather by private sector bodies. They are generally accepted. GAAP are a type of regulation