Financial Accounting Standard Board

The Hierarchy of Generally Accepted

Definition: The Financial Accounting Standards Board was created in 1973, replacing the
Accounting Principles Board and the Committee on Accounting Procedure of the American Institute of
Certified Public Accountants before it.

The FASB is a private body whose mission is to "establish and improve standards of
financial accounting and reporting for the guidance and education of the public,
including issuers, auditors and users of financial information."
The FASB publishes GAAP. independent board responsible for establishing and
interpreting generally accepted accounting principles. It was formed in 1973 to
succeed and continue the activities of the Accounting Principles Board (APB). FASB
standards are officially recognized as authoritive by the Securities and Exchange
Commission (SEC) and the American Institute of Certified Public Accountants. They
arise from consulation of a Financial Accounting Standards Advisory Council (FASAC)
made up of more than 30 members who are broadly representative of preparers,
auditors, and users of financial information, and from recommendations of task
forces established by the FASAC, such as the Emerging Issues Task Force (EITF) and
the Derivatives Implementation Group. As this is written, the FASB standards are
represented by statements numbered 1 through 154.

FASB 154 changes accounting rules relating to restatement .

FASB 153 addresses issues of cross-border accounting consistency and accounting for
nonmonetary exchanges.

FASB 149 amends and clarifies FASB 133 rules on derivatives and hedging activities.

FASB 148 addresses disclosure about methods of accounting for stock-based employee
compensation.

FASB 143 requires recognition of liability for asset retirement conditional on a future event.

FASB 142 issued June, 2001 eliminated the amortization of goodwill.

FASB 133 issued June 1998 established accounting and reporting standards for derivatives and
for hedging activities. It requires that an entity recognize all derivatives as either assets or
liabilities in the statement of financial position and measure those instruments at fair value. It
states conditions required for treating derivatives as hedges.

FASB 130 issued June 1997 establishes standards for reporting and display of comprehensive
income and its components (revenues, expenses, gains, and losses) in a full set of general
purpose financial statements. This statement requires that all items that are required to be
recognized under accounting standards as components of comprehensive income be reported in a
financial statement that is displayed with the same prominence as other financial statements.
FASB 128 simplifies the standards for computing earnings per share and makes them comparable
to international EPS standards. It replaces the presentation of primary EPS with a presentation of
basic EPS. It also requires dual presentation of basic and diluted EPS on the face of the income
statement for all entities with complex capital structures and requires a reconciliation of the
numerator and denominator of the basic EPS computation to the numerator and denominator of
the diluted EPS computation.