Accounting Framework, 50 Years in the Making, Finally Wraps Up

In the five decades since its creation in 1973, the standard-setter for US accounting rules has never had a complete operating manual to guide its work.

The Financial Accounting Standards Board’s internal handbook has been a patchwork of concepts laying out the purpose of financial reporting and defining some bedrock elements of financial statements. But the document, called FASB’s Conceptual Framework, had many holes and inconsistencies. The holes were a problem, but bigger problems sidetracked board attempts to plug them: the fallout from the Enron accounting scandal, the financial crisis, and the collapsed effort to converge US and international ...