Answer
The technical staff of the FASB conducts research on an identified accounting topic and prepares a “discussion memorandum” that is released by the Board for public reaction. The Board analyzes and evaluates the public response to the discussion memorandum, deliberates on the issues, and issues an “exposure draft” for public comment. The discussion memorandum merely presents all facts and alternatives related to a specific topic or problem, whereas the exposure draft is a tentative “statement.” After studying the public’s reaction to the exposure draft, the Board may reevaluate its position, revise the draft, and vote on the issuance of a final statement.
Work Step by Step
FASB's "discussion memorandum" is also referred to as preliminary views that are surrendered to the public for comment after which feedback is analyzed and used to prepare an "exposure draft." The feedback received is then considered during drafting of the final statement.
