What Is the FASB?

The FASB is one organization that provides standardized guidelines for financial reporting. The Financial Accounting Standards Board’s (FASB) mission is to establish and improve financial accounting and reporting standards for the guidance and education of the public, including issuers, auditors, and users of financial information.
Accounting standards are essential to the efficient functioning of the economy because decisions about the allocation of resources rely heavily on credible, concise, transparent, and understandable financial information. The public also uses financial information about individual entities, operations, and financial positions in various other decisions.

To accomplish its mission, the FASB acts to:

–Improve the usefulness of financial reporting by focusing on the primary characteristics of relevance and reliability and the qualities of comparability and consistency;
–Keep standards current to reflect changes in methods of doing business and changes in the economic environment;
–Consider promptly any significant areas of deficiency in financial reporting that might be improved through the standard-setting process;
–Promote the international convergence of accounting standards concurrent with improving the quality of financial reporting; and
–Improve the common understanding of the nature and purposes of the information contained in financial reports.

The FASB develops broad accounting concepts as well as standards for financial reporting. It also guides the implementation of standards. Concepts help guide the Board in establishing standards and providing a frame of reference, or conceptual framework, for resolving accounting issues. The framework will help to establish reasonable bounds for judgment in preparing financial information and to increase understanding of and confidence in financial information on the part of users of financial reports. It will also help the public understand the nature and limitations of information supplied by financial reporting.