Facts about FASB
An Open Decision-making Process
Actions of the FASB have an impact on many organizations within the Board’s large and diverse constituency. It is essential that the Board’s decision-making process be evenhanded. Accordingly, the FASB follows an extensive "due process" that is open to public observation and participation. This process was modeled on the Federal Administrative Procedure Act and, in several respects, is more demanding.
FASB Due Process Steps Required by the Rules of Procedure
The FASB has established the following procedures for developing accounting standards. These procedures are used for major agenda projects. Not all of the steps may be necessary for application and implementation projects. Many other steps are followed during the course of the project that are not specifically required by the Board’s Rules of Procedures.
- The Board receives requests/recommendations for possible projects and reconsideration of existing standards from various sources.
- The staff summarizes the information it receives and discusses its findings at a public Board meeting as part of the agenda-decision-making process.
- The Board votes on whether to add the project to its agenda. A simple majority vote is needed.
- The Board deliberates the various issues identified and analyzed by the staff at a series of public Board meetings.
- The Board issues the Exposure Draft. (In some projects, the staff may prepare and issue an Invitation to Comment or Preliminary Views prior to the Board issuing an Exposure Draft.)
- The Board holds a public roundtable meeting on the Exposure Draft, if necessary.
- The staff analyzes comment letters, public roundtable discussion, and any other information and the Board redeliberates the proposed provisions at public meetings.
- The Board issues a Statement or Interpretation by simple majority vote.
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