Answer
The Financial Accounting Foundation (FAF) is the sponsoring association of the FASB. The FAF chooses the individuals from the FASB and its Advisory Council, funds their exercises, and generally administers the FASB's exercises.
The FASB pursues a "due process" in developing a baisc FASB Statement of Financial Accounting Standards. In this, the following steps are taken: (1) A project or topic is identified and set on the Board's agenda. (2) A team of specialists from different divisions is gathered to characterize issues, problems, and alternatives affiliated with the topic. (3) Research and analysis are executed by the FASB specialized staff. (4) A discussion memorandum is formulated and discharged. (5) An open hearing is regularly held, as a rule, 60 days after the release of the memo. (6) The Board investigates and assesses the public response. (7) The Board deliberates on the issues and prepares an exposure draft for discharge. (8) After a 30-day (least) introduction period for the open remark, the Board assesses the reactions received. (9) An advisory committee evaluates the exposure draft in connection to public response, reexamines its position, and updates the draft if necessary. (10) The full Board gives the updated draft last consideration and votes on the issuance of a Standards Statement. The section of another accounting standard as a FASB Statement requires the help of five of the seven Board members.
Work Step by Step
Established in 1972, the Financial Accounting Foundation is an independent, not-for-profit, private-sector organization located in Norwalk, Connecticut charged with the administration, financing and oversight, of the FASB as well as the appointment the Governmental Accounting Standards Board (GASB).
