Thursday, July 2, 2009

the FASB and standard setting process

The FASB IS made up of seven salaried members. None of the members can maintain any business relations during their time on the Board, and four of the seven must be CPAs.
It is interesting to note that the FASB is not a governmental body, but rather a private sector group.
These seven members first determine the agenda for FASB and then appoint a task force to consider each topic on the agenda and all aspects of the area under consideration. Following this initial work, the task force drafts and releases a discussion memorandum to all interest parties, including making it available to the public. Usually after 60 days, a public hearing is held in relation to the discussion memorandum. Anyone who wishes can make a presentation at this hearing.
After the hearing the FASB evaluates the public response and prepares an exposure draft of the proposed statement. After it is released there is 30-day period for public comments. Following receipt of the public comments, the FASB either revises the draft if necessary or votes on the issuance of a Standards statement.
After a standard issued the FASB may issue formal FASB interpretations of the statement. Members of the FASB must vote on these interpretations and, if passed, they carry the same the authoritative weight as the standard itself.

No comments: