New format for FASB standards

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20 Apr 2007

The US Financial Accounting Standards Board has changed the format of its standards in several respects designed to improve understandability:

  • Standards will use bold text at the beginning of each section to convey the accounting principle for that section, similar to the approach that the IASB and the IASC have historically used.
  • Examples will be included in the body of the standard to illustrate the proposed accounting guidance for certain paragraphs. Several IASs, including IAS 12 and IAS 19, use this approach, but more recently in IFRSs and amended IASs the IASB has put examples in appendices of 'application guidance' (described as 'an integral part of the Standard) and 'implementation guidance' (described as accompanying but not part of the Standard).
  • All pronouncements at the top level within the generally accepted accounting principles hierarchy will be regarded as Statements, eliminating multiple types of accounting guidance formats that are at the same level in the hierarchy. Thus, interpretations, amendments, and revisions will no longer be used and will all be considered Statements with clarifying language included in the title to describe whether the Statement interprets, amends, or revises existing accounting literature.
FASB's new Exposure Draft of a Proposed Statement of Financial Accounting Standards Accounting for Financial Guarantee Insurance Contracts: an interpretation of FASB Statement No. 60, Downloadable Without Charge from FASB's Website  (PDF 301k), is the first ED in this format. FASB will continue its practice of including a summary at the front of its pronouncements. The summary in the financial guarantee ED is organised as follows:
  • Why Is the FASB issuing this proposed Statement?
  • What is the scope of this proposed Statement?
  • How will this proposed statement change current practice?
  • What is the impact of this proposed statement on existing accounting pronouncements?
  • What is the impact of this proposed statement on convergence with International Financial Reporting Standards?
  • What is the effective date of this proposed Statement?

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.