Prior to 2009, the FASB issued several types of pronouncements which had differing levels of authority. Explain the differing types of pronouncements, provide a brief explanation as to what changed after 2009 and why is it still important today?

Question

What will be an ideal response?

Answer 1

?FASB Pronouncements were issued with differing levels of authority. Statements of Financial Accounting Standards had the most authority in regards to specific topics. These pronouncements established the methods and procedures required for specific accounting issues. Interpretations had the next level of authority. The Interpretations provided clarification on ambiguous or conflicting issues as they related to issued standards. Staff Positions provided more application guidance allowing for limited or narrow revisions of already established standards. Technical bulletins followed after Staff Positions. These were issued due to reporting problems as they related to specific standards. The bulletins provided additional information to clarify, explain, or elaborate about the specific standard. Statements of Financial Accounting Concepts establish the theoretical foundation for financial accounting and reporting standards. Other pronouncements are in the form of question and answers.?Prior to 2009, these pronouncements were hard to follow, because they were numerous to say the least, and many times conflicted each other. In 2009, FASB introduced the FASB Accounting Standards Codification (ASC),which housed over 2,000 standards in one place of reference.?The hierarchy of pronouncements is important today because they are still referenced in accounting literature and allow justification for companies to explain their interpretation of GAAP.