Financial Accounting Foundation (FAF)

What Is the Financial Accounting Foundation?

The Financial Accounting Foundation (FAF) is an independent, private-area organization that is predominantly responsible for laying out and working on financial accounting and operating standards and instructing its constituents about those standards. The Financial Accounting Foundation has responsibility for the oversight, administration, and finances of two accounting boards and their advisory councils: the Governmental Accounting Standards Board (GASB), and the Financial Accounting Standards Board (FASB). GASB is a private non-governmental organization that makes accounting reporting standards, or generally accepted accounting principles (GAAP), for U.S. state and nearby governments.

Figuring out the Financial Accounting Foundation (FAF)

FASB is responsible for standards for publicly traded companies, private companies, and not-for-benefit organizations. Citizens, holders of municipal bonds, lawmakers, and oversight bodies depend on this financial data to shape public policy and make investments. The Financial Accounting Foundation (FAF) additionally chooses the individuals from the boards and councils that set accounting standards and safeguards their independence.

Individuals from the Financial Accounting Foundation (FAF) Team

The FAF incorporates the FAF management team, the FAF board of trustees, FASB, and GASB. The FAF is a non-stock Delaware corporation laid out in 1972 that works just for educational, charitable, logical, and scholarly purposes. The FAF, FASB, or GASB don't receive funds from Federal, state or nearby governments.

The FAF is represented by a board of trustees: an independent group of leaders with different personal and professional foundations and experience, including business, investment, capital markets, accounting, accounting, business education, and government. The size of the board is seven individuals. Trustees serve a single, five-year term, and are eligible for reappointment of one extra five-year term.

Since capital markets and governments incorporate numerous participants with contending requests and proprietary interests, independence is key to the activities of the FAF's standard-setting boards, FASB, and GASB. This independence permits them to give objectivity and integrity to the U.S. financial reporting system. Since the FAF is an independent entity without any stakes in specific results, the FAF's boards can settle on objective choices on accounting standards without being influenced by industrial campaigning gatherings or political pressure.

Crafted by the FAF, FASB, and GASB is funded by accounting support fees, subscription and publication revenue, and investment income. The biggest share of financial support for the standard-setting boards comes from accounting support fees. Those fees are paid by publicly traded companies (for FASB) and municipal bond brokers and dealers (for GASB).