Page 364 - Encyclopedia of Business and Finance

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Global Economy

marizes the accounting issue involved and the results of OTHER ACCOUNTING LITERATURE
the EITF discussion, including any consensus reached on Occasionally new transactions or events for which there
the issue. Each Abstract also reports, in its “status” section, are no established accounting principles must be reported.
subsequent developments on that issue, such as issuance In those instances, it is sometimes possible to identify an
of a relevant Securities and Exchange Commission Staff analogous transaction or event for which there is an estab-
Accounting Bulletin or an FASB Technical Bulletin. If the lished principle and report the new transaction or event
EITF can reach consensus on an issue, usually that is similarly. In the absence of a pronouncement in one of the
taken as an indication that no action is needed by the four categories above or an analogous transaction or event,
FASB or AcSEC. Alternatively, if no consensus is possible, other accounting literature should be considered. Exam-
it may be an indication that action by one of those bodies ples of other literature include FASB Concepts State-
is necessary. ments; APB Statements; AICPA (AcSEC) Issues Papers;
AcSEC Practice Bulletins are used to disseminate pronouncements of other accounting standard-setting
AcSEC’s views for the purpose of providing practitioners bodies, professional associations, or regulatory agencies;
and preparers with guidance on narrow financial account- technical information service inquiries; and accounting
ing and reporting issues. The issues covered by Practice textbooks, handbooks, and articles.
Bulletins are limited to those that have not been and are
not being considered by the FASB. Therefore, AcSEC SUMMARY
Practice Bulletins, which are reviewed by the FASB, are
Generally accepted accounting principles are not a set of
only issued after the FASB has informed AcSEC that it specific circumscribed standards that can be easily found
has no current plans to consider the issue.
in one convenient set of rules. Rather, they are an amal-
gam arising from various sources and with an established
Category D. Category D includes (1) AICPA Accounting hierarchy. Generally accepted accounting principles range
Interpretations, (2) FASB staff implementation guides, from official standards established by the FASB, through
and (3) practices that are widely recognized and prevalent literature from the AICPA, to, in some situations, articles.
either generally or in an industry. Yet the system seems to work reasonably well. Financial
AICPA Accounting Interpretations (not to be con- statements prepared pursuant to GAAP are highly
fused with FASB Interpretations, which are included in regarded in the United States for the quality and compa-
Category A) were issued from March 1971 through rability of the information they provide. Thus, investors
November 1973. The purpose of the interpretations was and other users have been well served by our system of
to provide timely guidance for applying APB Opinions financial reporting, which results in the fair presentation
without the formal procedures required for an APB Opin- of financial information prepared in conformity with gen-
ion. In addition, they were used to clarify points on which erally accepted accounting principles.
past practice may have varied and been considered gener-
ally accepted. The interpretations, prepared by AICPA SEE ALSO Accounting
staff and reviewed by members of the accounting profes-
sion, are not considered to be official pronouncements of BIBLIOGRAPHY
the APB. Although most of the interpretations have been Financial Accounting Standards Board (1999). Accounting Stan-
dards: Vol. I. General Standards; Topical Index; Vol. II: Industry
superseded by other accounting standards, Volume II of
Standards; Topical Index/Appendixes. New York: Wiley.
Original Pronouncements includes those that continue in
effect as well as reference pages for those that have been
superseded. Edmund L. Jenkins
Implementation guides, which appear in a question- Cheri Reither Mazza
and-answer format, are issued as aids to understanding
and implementing various FASB Statements. Typically,
those guides are issued when an unusually high number of
inquiries are received and the accounting required by a GLOBAL ECONOMY
given FASB Statement is particularly complex. The posi- Global economy is the exchange of goods and services
tions and opinions expressed in those guides are those of integrated into a huge single global market. It is virtually
the FASB staff and do not represent official positions of a world without borders, inhabited by marketing individ-
the FASB. Staff implementation guides are available indi- uals and/or companies who have joined the geographical
vidually from the FASB as published and also are included world with the intent of conducting research and develop-
collectively in FASB Staff Implementation Guides. ment and making sales.

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