{"id":82,"date":"2024-09-06T16:46:16","date_gmt":"2024-09-06T16:46:16","guid":{"rendered":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/chapter\/the-role-of-the-fasb\/"},"modified":"2024-09-13T01:50:17","modified_gmt":"2024-09-13T01:50:17","slug":"the-role-of-the-fasb","status":"publish","type":"chapter","link":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/chapter\/the-role-of-the-fasb\/","title":{"raw":"The Role of the FASB","rendered":"The Role of the FASB"},"content":{"raw":"<section class=\"textbox learningGoals\" aria-label=\"Learning Goals\">\r\n<ul>\r\n \t<li>Describe the role of the FASB in setting accounting standards<\/li>\r\n<\/ul>\r\n<\/section>&nbsp;\r\n\r\nIn 1973, the FASB established financial accounting and reporting standards for public and private companies and not-for-profit organizations.\r\n\r\nThe FASB is governed and funded by the Financial Accounting Foundation (FAF), which was established in 1972 as an independent, private-sector, not-for-profit organization. The FAF is responsible for the oversight, administration, financing, and appointing of members for both the FASB and the Governmental Accounting Standards Board (GASB).\r\n\r\nThe SEC has designated the FASB as the accounting standard setter for publicly traded companies. In addition, FASB standards are recognized as authoritative by many other organizations, including state Boards of Accountancy and the American Institute of CPAs (AICPA).\r\n\r\nThe advantage of the accounting industry creating the rules, instead of Congress, is that rule-making is less of a political give-and-take and more based on logic and professional opinion.\r\n\r\n<section class=\"textbox watchIt\" aria-label=\"Watch It\">\r\n<p><iframe width=\"530\" height=\"315\" src=\"https:\/\/www.youtube.com\/embed\/KP9dmEySGJ8\"><\/p>\r\n<p>You can view the <a href=\"https:\/\/course-building.s3-us-west-2.amazonaws.com\/Financial+Accounting\/Transcripts\/FASBHasStandardsThatWork_transcript.txt\" target=\"_blank\" rel=\"noopener\">transcript for \"FASB Has Standards That Work\" here (opens in new window)<\/a>.<\/p>\r\n\r\n<\/section>&nbsp;\r\n<h2>FASB Mission<\/h2>\r\n<blockquote>The collective mission of the FASB, the Governmental Accounting Standards Board (GASB), and the FAF is to establish and improve financial accounting and reporting standards to provide useful information to investors and other users of financial reports and educate stakeholders on how to most effectively understand and implement those standards.[footnote]https:\/\/www.fasb.org\/facts\/index.shtml[\/footnote]<\/blockquote>\r\nThe non-profit FASB is funded primarily through accounting support fees, which are paid by U.S. corporations that issue publicly traded securities. This funding method was written into the Sarbanes-Oxley Act of 2002, as amended (the Sarbanes-Oxley Act). The FASB also receives revenue from the sales of subscriptions and publications.\r\n\r\n<section class=\"textbox tryIt\" aria-label=\"Try It\">[ohm2_question hide_question_numbers=1]25105[\/ohm2_question]<\/section>","rendered":"<section class=\"textbox learningGoals\" aria-label=\"Learning Goals\">\n<ul>\n<li>Describe the role of the FASB in setting accounting standards<\/li>\n<\/ul>\n<\/section>\n<p>&nbsp;<\/p>\n<p>In 1973, the FASB established financial accounting and reporting standards for public and private companies and not-for-profit organizations.<\/p>\n<p>The FASB is governed and funded by the Financial Accounting Foundation (FAF), which was established in 1972 as an independent, private-sector, not-for-profit organization. The FAF is responsible for the oversight, administration, financing, and appointing of members for both the FASB and the Governmental Accounting Standards Board (GASB).<\/p>\n<p>The SEC has designated the FASB as the accounting standard setter for publicly traded companies. In addition, FASB standards are recognized as authoritative by many other organizations, including state Boards of Accountancy and the American Institute of CPAs (AICPA).<\/p>\n<p>The advantage of the accounting industry creating the rules, instead of Congress, is that rule-making is less of a political give-and-take and more based on logic and professional opinion.<\/p>\n<section class=\"textbox watchIt\" aria-label=\"Watch It\">\n<p><iframe loading=\"lazy\" width=\"530\" height=\"315\" src=\"https:\/\/www.youtube.com\/embed\/KP9dmEySGJ8\"><\/iframe><\/p>\n<p>You can view the <a href=\"https:\/\/course-building.s3-us-west-2.amazonaws.com\/Financial+Accounting\/Transcripts\/FASBHasStandardsThatWork_transcript.txt\" target=\"_blank\" rel=\"noopener\">transcript for &#8220;FASB Has Standards That Work&#8221; here (opens in new window)<\/a>.<\/p>\n<\/section>\n<p>&nbsp;<\/p>\n<h2>FASB Mission<\/h2>\n<blockquote><p>The collective mission of the FASB, the Governmental Accounting Standards Board (GASB), and the FAF is to establish and improve financial accounting and reporting standards to provide useful information to investors and other users of financial reports and educate stakeholders on how to most effectively understand and implement those standards.<a class=\"footnote\" title=\"https:\/\/www.fasb.org\/facts\/index.shtml\" id=\"return-footnote-82-1\" href=\"#footnote-82-1\" aria-label=\"Footnote 1\"><sup class=\"footnote\">[1]<\/sup><\/a><\/p><\/blockquote>\n<p>The non-profit FASB is funded primarily through accounting support fees, which are paid by U.S. corporations that issue publicly traded securities. This funding method was written into the Sarbanes-Oxley Act of 2002, as amended (the Sarbanes-Oxley Act). The FASB also receives revenue from the sales of subscriptions and publications.<\/p>\n<section class=\"textbox tryIt\" aria-label=\"Try It\"><iframe loading=\"lazy\" id=\"ohm25105\" class=\"resizable\" src=\"https:\/\/ohm.one.lumenlearning.com\/multiembedq.php?id=25105&theme=lumen&iframe_resize_id=ohm25105&source=tnh\" width=\"100%\" height=\"150\"><\/iframe><\/section>\n<hr class=\"before-footnotes clear\" \/><div class=\"footnotes\"><ol><li id=\"footnote-82-1\">https:\/\/www.fasb.org\/facts\/index.shtml <a href=\"#return-footnote-82-1\" class=\"return-footnote\" aria-label=\"Return to footnote 1\">&crarr;<\/a><\/li><\/ol><\/div>","protected":false},"author":6,"menu_order":3,"template":"","meta":{"_candela_citation":"[{\"type\":\"original\",\"description\":\"The Role of the FASB\",\"author\":\"Joseph Cooke\",\"organization\":\"Lumen Learning\",\"url\":\"\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"\"},{\"type\":\"copyrighted_video\",\"description\":\"FASB Has Standards That Work\",\"author\":\"Financial Accounting Standards Board\",\"organization\":\"\",\"url\":\"https:\/\/www.youtube.com\/watch?v=KP9dmEySGJ8\",\"project\":\"\",\"license\":\"arr\",\"license_terms\":\"Standard YouTube License\"}]","pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":[],"pb_section_license":""},"chapter-type":[],"contributor":[],"license":[],"part":79,"module-header":"- Select Header -","content_attributions":[{"type":"original","description":"The Role of the FASB","author":"Joseph Cooke","organization":"Lumen Learning","url":"","project":"","license":"cc-by","license_terms":""},{"type":"copyrighted_video","description":"FASB Has Standards That Work","author":"Financial Accounting Standards Board","organization":"","url":"https:\/\/www.youtube.com\/watch?v=KP9dmEySGJ8","project":"","license":"arr","license_terms":"Standard YouTube License"}],"internal_book_links":[],"video_content":null,"cc_video_embed_content":{"cc_scripts":"","media_targets":[]},"try_it_collection":null,"_links":{"self":[{"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/pressbooks\/v2\/chapters\/82"}],"collection":[{"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/wp\/v2\/users\/6"}],"version-history":[{"count":4,"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/pressbooks\/v2\/chapters\/82\/revisions"}],"predecessor-version":[{"id":1049,"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/pressbooks\/v2\/chapters\/82\/revisions\/1049"}],"part":[{"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/pressbooks\/v2\/parts\/79"}],"metadata":[{"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/pressbooks\/v2\/chapters\/82\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/wp\/v2\/media?parent=82"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/pressbooks\/v2\/chapter-type?post=82"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/wp\/v2\/contributor?post=82"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/wp\/v2\/license?post=82"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}