Financial Accounting Standards Board

Summary of Financial Accounting Standards Board

A private, non-profit organization concerned with formulating standards for financial accounting and reporting by U.S. industry. The FASB is independent of the American Institute of Certified Public Accountants (AICPA) and other professional bodies. In 1973 the FASB succeeded the Accounting Principles Board of the AICPA, which had been the author of financial accounting standards. In the same year, the Securities and Exchange Commission (SEC) issued Accounting Series Release 150 (now codified in SEC Financial Reporting Release No. 1, section 101) recognized FASB pronouncements as authoritative. The Securities and Exchange Act of 1933 empowers the SEC to devise accounting standards to ensure compliance with Federal securities statutes. In one instance, the SEC rejected an FASB standard; in all other cases, however, U.S. financial accounting must conform to FASB pronouncements.

The FASB is assisted by an advisory council of approximately forty individuals drawn from public accounting, government, the academic community, and others concerned with financial accounting; the Comptroller General of the United States is included among the members.

The FASB has issued two pronouncements dealing with the problems of currency fluctuation, Financial Accounting Standards Board Statement No. 8, which was succeeded by Financial Accounting Standards Board Statement No. 52 (qq. v.). The FASB maintains its headquarters in Stamford, Connecticut.

(Main Author: William J. Miller)