Flashcards in FASB and Standard Setting Deck (14):
What does GAAP address?
Recognition, Measurement, Disclosure
Meaning of Recognition?
An item is recorded in an account and ultimately affects the financial statements
Meaning of measurement?
Concerns the dollar amount assigned to an item
Meaning of Disclosure?
Many unrecognized amounts are reported in the footnotes to complete the portrayal of the firm's financial position and performance
GAAp requires that many assets be reported at what amount?
At their historical cost, rather than at current market value
Who is FASB?
FASB is currently the standard-setting body in the United States
Who is SEC?
The federal government agency that administers the securities laws of the United States. They inforce GAAP
What is the AICPA?
The national professional organization for practicing CPAs
What are the three current Accounting Standard-setting mechanisms/groups in the US?
FAF, FASB and FASAC
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.
What does FASB do?
Establishes financial accounting standards for business entities
What does FASAC (Fin Acctg Standards Advisory) do?
Provides guidance on major policy issues, project priorities, and the formation of task forces
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)