Question 15Q - Intermediate Accounting (Kieso)

Question

Distinguish between FASB Accounting Standards Updates and FASB Statements of Financial Accounting Concepts.

Step-by-Step Solution

Answer

Financial Accounting Standards Board (FASB) issues Accounting Standards Updates (ASU) to convey changes to the FASB Codification, consisting of changes to non-authoritative SEC content. On the other hand, the statement of Financial Accounting Concepts (SFAC) is a file issued by the Financial Accounting Standards Board (FASB), including concepts of financial reporting.

Definition of Accounting Standards

The objective of these standards is to provide uniformity in financial reporting and to ensure consistency and comparability of the information provided by the business firms. It provides useful information to the users to interpret published reports.

Difference between FASB Accounting Standards Updates and FASB Statements of Financial Accounting Concepts

FASB Accounting Standards Updates are pronouncements of the Financial Accounting Standards Board that are consolidated into the FASB codification and thus indicate the accounting profession’s authoritative pronouncements on accounting and reporting practices. At the same time, FASB Statements of Financial Accounting Concepts is a component of FASB’s conceptual framework project. The series explains the fundamental objectives and concepts that are used by FASB in advancing future standards of financial accounting and reporting. These do not authorize Generally Accepted Accounting Principles (GAAP) like Statement of Financial Accounting Standards.