Legal Definitions - FASB

FASB

FASB stands for Financial Accounting Standards Board. It is an organization that creates and updates accounting standards for companies in the United States.

One example of a standard created by FASB is the rule that companies must report their financial statements using Generally Accepted Accounting Principles (GAAP). This ensures that all companies are using the same accounting methods and makes it easier for investors to compare financial information between companies.

Another example is the recent update to the revenue recognition standard, which provides guidance on how companies should recognize revenue from contracts with customers. This helps to ensure that companies are reporting revenue in a consistent and transparent manner.

FASB plays an important role in ensuring that companies are reporting their financial information accurately and transparently. By creating and updating accounting standards, FASB helps to promote consistency and comparability in financial reporting, which is important for investors and other stakeholders who rely on this information to make decisions.