Ever wonder why the FASB takes on certain rule-making projects? Now we know! The most frequently cited reason a project is undertaken is to reduce diverse practice and inconsistent guidance, according to a new study. The authors examined 211 financial accounting standards issued over a 40-year span—from 1973 to 2014. They also found that accounting for financial instruments is the most frequent theme across accounting standards, which may explain the growth in fair value measurement in U.S GAAP. The study is “How Does the FASB Make Decisions? Agenda Setting, Individual Board Members, and Fair Value Accounting.”
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