The FASB

The FASB (Financial Accounting Standard Board ) is part of a larger, nonprofit, private
group that is independently structured from all other business entities and professional
organizations. The overall structure is comprised of the FASB, the Financial Accounting
Foundation, the Financial Accounting Standards Advisory Council, the Governmental
Accounting Standards Board and the Governmental Accounting Standards Advisory
Council.
The FASB is recognized by the Securities and Exchange Commission as the designated
accounting standard setter for public companies. FASB standards are recognized as
authoritative by many other organizations, including state Boards of Accountancy and
the American Institute of CPAs (AICPA). The FASB develops and issues financial
accounting standards through a transparent and inclusive process intended to promote
financial reporting that provides useful information to investors and others who use
financial reports.
FASB MISSION
The FASB's stated mission is to establish and improve financial accounting and
reporting standards, and to provide useful information to investors and other people
who use financial reports. The FASB seeks to actively achieve this mission by
facilitating an open and independent reporting process that allows broad participation
from company stakeholders.
The mission and activity of the FASB are overseen by FAF's Board of Trustees. FAF is
responsible for all the oversight, administration and finances of the FASB and the
GASB. The FAF's advisory board is also responsible for protecting the standard-setting
process and appointing members of the other organizations.
Advisory Groups
The FASB has a number of advisory groups consisting of investors, preparers, and
auditors. These groups meet periodically to provide input to the FASB on various
issues, including:
Financial Accounting Standards Advisory Council (FASAC), which is the FASB’s

primary advisory group formed in 1973, and consists of investors, preparers, auditors,
and other users of financial reporting
Investor Advisory Committee (IAC), which provides investors’ perspective in

connection with the development of financial accounting and reporting standards.
Project-specific working groups: The Board often will create a working group of people
with specialized experience to advise it on project-specific standard-setting issues.
These groups, which always include investors and other users, meet periodically with
the Board and staff.
General and project-specific investor outreach: Board members and staff often contact
investors directly to solicit their views on financial reporting issues, including whether
to add a project to the agenda or to get input on the relative usefulness of alternative
approaches to solving particular reporting problems.
Input on proposals: A main feature of the Board’s due process is the exposure of
proposals for public comment. The exposure process allows anyone interested in
financial reporting, including investors, to provide their views on proposed standards.
Post-Implementation Review (PIR): The FAF Board of Trustees (which provides

oversight to the FASB) reviews FASB standards after they have been in effect for a few
years to see if the financial reporting objectives underlying those standards are being
met. Investor input is critical to to this process.
WHY ARE FASB ACCOUNTING STANDARDS IMPORTANT TO INVESTORS?
Financial reporting is a communication between a company and those who provide

resources to that company. The FASB's goal is to set accounting standards that produce
financial information useful in helping investors decide whether to provide resources to
a company, and whether the management of that company has made good use of the
resources it already has.
While we believe sound financial reporting leads to stronger capital markets by helping
investors make informed decisions, it is important to note:
The purpose of financial reporting is not to create the illusion of economic stability.
The purpose of financial reporting is to provide an objective look at a company’s

financial situation.
While the FASB is always seeking to improve financial reporting, it carefully weighs the
cost of making accounting changes versus the benefit of those changes to investors.
HOW CAN I FIND OUT WHAT PROJECTS THE FASB IS WORKING ON?
For projects, we communicate externally in a variety of ways:

Each time the Board meets in a public decision-making meeting, it provides observers
with a handout that describes the issues being discussed and a summary of significant
investor input received. Those meeting handouts are available on the FASB website.
Minutes or other summaries of public meetings of standing advisory groups and

project-specific working groups are available on the FASB website.
The basis for conclusions section of each Exposure Draft and final Accounting
Standards Update describes the various ways the Board obtained user views, what
those views were, and how those views influenced its judgments.
The FASB publishes a quarterly e-newsletter, the FASB Outlook, which is designed to
keep stakeholders informed about key FASB projects and activities. It presents current
accounting and financial reporting issues in a “plain-English,” user-friendly, format
designed to provide quick access to stories of interest to the busy professional. The
FASB Outlook includes a column, For the Investor, which features Board and staff
perspectives on issues that impact investors and other users of financial statements.
WHY ARE THE FASB NOT-FOR-PROFIT ENTITY TEAM, AND WHAT DO THEY
DO?
The FASB has a long-standing commitment to the not-for-profit sector as part of the
FASB’s standard-setting process for U.S. generally accepted accounting principles
(GAAP). Over the years, the FASB has addressed the accounting and reporting needs of
the sector, both for transactions that are unique to the sector (e.g., contributions
received) and for transactions that it has in common with public and private business
enterprises (e.g., employee postretirement benefit obligations). The FASB has staff
members dedicated to advising the Board and other staff on issues pertinent to the not-
for-profit sector and communicating with members of the sector. To reinforce and
broaden such consultation and communication, in October 2009 the FASB approved the
creation of a Not-for-Profit Advisory Committee (NAC). In addition, the FASB’s NAC is
supported by a standing Not-for-Profit Resource Group.

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The FASB (Financial Accounting Standard Board ) is part of a larger, nonprofit, private

Financial Accounting Standards Advisory Council (FASAC), which is the FASB’s

Investor Advisory Committee (IAC), which provides investors’ perspective in

Post-Implementation Review (PIR): The FAF Board of Trustees (which provides

WHY ARE FASB ACCOUNTING STANDARDS IMPORTANT TO INVESTORS?

Financial reporting is a communication between a company and those who provide

The purpose of financial reporting is to provide an objective look at a company’s

For projects, we communicate externally in a variety of ways:

Minutes or other summaries of public meetings of standing advisory groups and

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