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Accounting Principles Board (APB)

Accounting Principles Board (APB)

What Is the Accounting Principles Board?

The Accounting Principles Board (APB) was the legitimate body of the American Institute of Certified Public Accountants (AICPA) from 1959 until 1973. It was supplanted in 1973 by the Financial Accounting Standards Board (FASB).

The purpose of the APB was to issue rules and rules on accounting principles. A portion of the feelings delivered by the APB actually stand as part of the Generally Accepted Accounting Principles (GAAP), however most have been either amended or totally supplanted by FASB statements.

Understanding the Accounting Principles Board

The APB served an important job in its time, establishing the groundwork for GAAP, the set of accounting standards and procedures that are expected to guarantee consistency, transparency, and integrity in U.S. corporate financial statements.

Essentially all public corporations that operate in the U.S. follow the GAAP standards, which make it more straightforward for investors and auditors to survey financial statements and compare one organization's outcomes to those of others.

Those standards started to be developed by the APB, which was accused of making rules for accounting and giving declarations connected with accounting theory and practice. Its enrollment comprised of somewhere in the range of 18 and 21 delegates of accounting firms, corporate executives, and scholastics. A 66% vote of the individuals was required to issue an assessment.

Early Days

Some work on accounting standards started as soon as the 1930s, as a reaction to the 1929 stock market crash that was undoubtedly somewhat accused on questionable corporate accounting practices. The Securities Act of 1933 supported better practices yet did close to nothing to order them.

The APB itself was a replacement organization to the Committee on Accounting Procedure, a group that originally endeavored to make and impose a set of standards for financial reporting. The committee was not thought of as effective and was hopeless toward the finish of World War II.

The APB issued 31 conclusions during its concise presence, including rules connected with accounting for leases, income taxes, business combinations, intangibles, stock issued to employees for compensation, and early extinguishment of debt. It likewise distributed feelings on disclosure of accounting policies and reporting interim financial data and the aftereffects of discontinued operations.

In any case, apparently the APB couldn't keep pace with the developing complexity of transactional activity that required financial reporting.

FASB Created

It was supplanted in the mid 1970s by FASB, a private, non-benefit organization drove by seven full-time board individuals.

For corporations situated in the European Union, the International Financial Reporting Standards (IFRS) rules are the equivalent of GAAP.

The board acquired impressive clout in 1973 when the Securities and Exchange Commission announced it would acknowledge the board's rules and professions seeing financial reporting as definitive.

Today, government agencies and non-benefit organizations as well as public corporations generally embrace GAAP standards. The principal alternative is the International Financial Reporting Standards (IFRS), which sets the standards in all European Union nations and numerous different countries.


  • All U.S. public corporations are required to follow the GAAP standards to make financial reports reliable and transparent.
  • The Accounting Principles Board (APB) was a forerunner to the Financial Accounting Standards Board, which lays out generally accepted accounting principles (GAAP).
  • The APB was in presence from 1959 to 1973.