Why are FASB accounting standards important to investors?
Financial reporting is a communication between a company and those who provide resources to that company. Our 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 that 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. It is also important to point out the fact that 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. Why does the FASB want to hear from investors? In order to improve U.S. GAAP, we ne
Related Questions
- FASB has announced it will make changes to the fair value accounting standards in the next few weeks. Why didnt NCUA wait to see if those changes may have impacted the financial position of these corporate credit unions?
- What Process Does the FASB Follow in Developing Accounting Standards?
- Does FASB develop accounting standards appropriately?
