Question 14Q
Question
How are FASB preliminary views and FASB exposure drafts related to FASB “statements”?
Step-by-Step Solution
VerifiedFASB preliminary views refer to those views that indicate the opinions and facts of a certain issue in accounting. An exposure draft resembles an opinion statement that comprises right and wrong opinions on the new standards presented.
FASB, commonly known as Financial Accounting Standards Board comprises various statements and principles set up for reasonable accounting. The activities of the Financial Accounting Standards Board (FASB) are guided and looked after by the Securities Exchange Commission (SEC).
Research is being conducted on an identified accounting topic by the technical staff of the FASB and preliminary views are prepared thereafter that are released by the Board for public opinion. The Board examines and estimates the responses of the public to the preliminary views, discusses the issues, and then issues an “exposure draft” for public comment. The preliminary views indicate all the facts and alternatives associated with a particular topic or problem, while, the exposure draft is a provisional “statement”. After examining the public’s response to the exposure draft, the Board may reconsider its position, revise the draft, and vote on the issuance of a financial statement.