Intermediate Accounting (16th Edition)

Published by Wiley
ISBN 10: 1118743202
ISBN 13: 978-1-11874-320-1

Chapter 1 - Financial Accounting and Accounting Standards - Review and Practice - Questions - Page 22: 14


During the formulation and establishment of financial accounting standards, the FASB relies on two major premises that is: FASB should be responsive to the needs and viewpoints of the entire economic community and not just the public accounting professions. the other premise is that it should operate in full view of the public that is through a 'due process' system that gives interested parties ample opportunities to make their views know. to make achievement of these goals, FASB follows some specific steps to develop a typical FASB pronouncement and the preliminary exposure and views draft are part of the FASB 'due process' system.

Work Step by Step

Additionally, some of the steps that are taken to develop the FASB's pronouncements and the preliminary views and exposure drafts comprise of: i. topics are identified and included on the board's agenda. ii. research and analysis is conducted and the preliminary views of merits and demerits issued. iii. the public hearings is done on the proposed standards. iv. board evaluates research and public response as well issues exposure drafts. v. the board evaluates responses and changes exposure drafts that is if its necessary and lastly, issues the final standards.
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