Note, however, that there have been many instances in which, as a project developed and its implications became clear, some original proponents of the project changed their view and urged the Board to slow down or to cease and desist altogether. Think of different accounting treatment options or alternatives as different styles of painting.
That gave rise to reconsideration of Statement 8 on foreign currency translation. For example, as financial statement preparers, banks, among others, sometimes incur significant costs to comply with accounting standards. Decisions on such matters properly reside in the United States Congress and with public agencies.
There is no political impediment. At the same time, we must weigh those considerations against the needs of users for better and more timely information.
The Board now concluded that the judicial admissions of No. Calculating the weight to impute to an economic effect therefore remains unfastened. Amazingly, legislative proposals addressing this accounting issue were introduced before Congress both opposing and supporting proposals in the exposure draft.
As long as it functions in a manner calculated to satisfy the public demand for financial reporting that is reliable, relevant, and comparable from company to company, the FASB always will be regarded with uneasiness, particularly by those who are the preparers of financial information.
Given the serious corporate reporting failures in the early 21st century, ex: Yes, at times that kind of information has had temporarily damaging consequences for certain parties. But if accounting standards were changed to bring something that was buried within the notes to the face of the financial statements, the perceived risk does change.
Perhaps our critics have done us a service by elevating the discussion of accounting standards into the realm of "social consequences" and "public policy. Naturally, there is much more contrast between the two paintings than before.
This represented a broader outreach for comments on potential projects than has ever occurred before.
But costs may also include disclosure costs, measured in terms of lost competitive advantage. The business world thrusts them on us.
Said another way, we approach the task of setting standards determined to perform it in as neutral a fashion as is humanly possible. Thus, they only perceive the risk that is shown on the face of the financial statements. One of the advantages of the process is that external parties are invited to comment on exposure drafts or present testimony during roundtable discussions.
Assessing and quantifying these types of behavioural reactions sing the economic effects of a proposed criterion will ever present troubles for the FASB. Statement of Financial Accounting Concepts No. An agent of change So, to summarize our position regarding these criticisms of the FASB, we offer the following.
Our Rules of Procedure specify that only the Board itself will make agenda decisions, but the process has been sensitive to constituent interests from the beginning. The Exposure Draft was highly controversial and the Board received over 1.Should the Fasb Consider Economic Consequences in Standard Setting Essay Sample The FASB should see economic effects in the standard scene procedure ; “The Board can non discontinue to be concerned about the cost-effectiveness of its criterions.
The economic consequences of a new financial reporting standard are separate and distinct from an analysis of costs and benefits relating to the adoption of a new standard.
The role of financial reporting is not to deter-mine or influence what capital allocation decisions should be made or what actions should be taken by management. Should economic consequences be considered by the FASB in the accounting standard setting process?
Yes, the FASB should consider economic consequences in the accounting standard setting process. Ever since the creation of the FASB init was.
Should the Fasb Consider Economic Consequences in Standard Setting Essay Sample. The FASB should consider economic consequences in the standard setting process; “The Board cannot cease to be concerned about the cost-effectiveness of its standards.
To do so would be a dereliction of its duty and a disservice to its constituents”. The FASB should consider economic consequences in the standard setting process; “The Board cannot cease to be concerned about the cost-effectiveness of its standards.
To do so would be a dereliction of its duty and a disservice to its constituents”. Should the Fasb Consider Economic Consequences in Standard Setting Words | 7 Pages The FASB should consider economic consequences in the standard setting process; “The Board cannot cease to be concerned about the cost-effectiveness of its standards.Download