What Process Does the FASB Follow in Developing Accounting Standards?
Because the actions of the FASB affect so many organizations, its decision-making process must be thorough. The FASB carefully considers the views of all interested partiesconsumers, preparers, and auditors of financial information. Our Rules of Procedure require an extensive due process that was modeled on the Federal Administrative Procedure Act, but it is broader and more open in several ways. It involves public meetings, public hearings, and exposure of our proposed standards to external scrutiny and public comment. The Board makes final decisions only after carefully considering and understanding the views of all parties. The FASBs due process for developing a new financial reporting standard is best illustrated by describing the process followed in developing Statements 141 and 142: • Following the Boards extensive agenda decision process, we decided to add the project on business combinations to the Boards technical agenda in 1996. (Attachment 2 includes a detailed description o
