The Financial Accounting Standards Board has published an exposure draft to rank generally accepted accounting principles.
The hierarchy of GAAP, which is currently defined in a standard issued by the American Institute of CPAs, ranks the relative authority of accounting principles issued from multiple standard-setters.
FASB Chairman Robert Herz called the proposed statement "an important first step towards improving the GAAP hierarchy."
Said Herz, "Several other FASB projects, such as the codification and retrieval project, aim to simplify standards and the standard-setting process. This proposed statement facilitates those future improvements."
The FASB codification and retrieval project will integrate existing U.S. GAAP into a single source, creating a single authoritative codification of GAAP.
The comment period for the exposure draft ends June 27. The document is available on FASB's Web site at www.fasb.org.
The board expects to issue a final standard on the GAAP hierarchy in the third quarter.
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