For the last two months, we've been describing the Financial Accounting Standards Board's recent exposure draft on the hierarchy of principles, specifically its assertion that compliance with published generally accepted accounting principles always leads to relevant and reliable information. Our previous four columns describe the intolerable flaws in this premise.

The first two focused on FASB's proposal to eliminate Rule 203 exceptions that permit, and even encourage, departures from GAAP, when compliance would produce misleading financial statements. This clause is essential for innovation when the old way can no longer be considered adequate.

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