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Accounting Information > Financial Statements > Statement of Changes in Financial Position
Statements of Financial Accounting Standards

Generally accepted accounting principles, or GAAP, are the guiding principles of the accounting profession. GAAP is basically a four-tier hierarchy, made up of several different sources of accounting principles. The top level of the hierarchy consists of FASB Statements of Financial Accounting Standards (SFAS), FASB Interpretations, APB Opinions, and Accounting Research Bulletins.


There are over one hundred FASB Statements of Financial Accounting Standards. Some of the statements are amendments to, technical corrections of, or rescissions of, former statements. FASB Statement Number One, or FAS 1, Disclosures of Foreign Currency Translation Information, has been superseded by FAS 8 and FAS 52. FAS 8, Accounting for the Translation of Foreign Currency Transactions and Foreign Currency Financial Statements, was superseded by FAS 52, Foreign Currency Translation. Parts of FAS 52 have been amended by FAS 109, Accounting for Income Taxes, and FAS 142, Goodwill and Other Intangible Assets. As new policies are adopted, or old policies changed, the statements change to reflect that.

Each FAS deals with important accounting procedures or methodology on how the profession has decided to handle different items and transactions. Often, there is more than one FAS related to a single issue. For example, there are at least three statements related to balance sheet classification. FAS 6 is Classification of Short-Term Obligations Expected to be Refinanced. Also related to balance sheet classification is FAS 43, Accounting for Compensated Absences. FAS 78 deals with Classification of Obligations That Are Callable by the Creditor.

Another important accounting principle is that of capitalizing interest in the acquisition cost of an asset. There are at least four Statements of Financial Accounting Standards on this topic. FAS 34 is simply called Capitalization of Interest Cost. FAS 42 is Determining Materiality for Capitalization of Interest Cost. FAS 58 discusses Capitalization of Interest Cost in Financial Statements That Include Investments Accounted for by the Equity Method. Capitalization of Interest Cost in Situations Involving Certain Tax-Exempt Borrowings and Certain Gifts and Grants is FAS 62.

Accounting for Leases may be the subject with the largest number of statements and pronouncements. The main statement is FAS 13, Accounting for Leases. A series of subsequent pronouncements interpret, explain, and amend FAS 13. Some of these additional statements are FAS 22, Changes in the Provisions of Lease Agreements Resulting from Refundings of Tax-Exempt Debt, FAS 23, Inception of the Lease, FAS 28, Accounting for Sales with Leasebacks, and FAS 29, Determining Contingent Rentals.

There are at least six FAS statements for not-for-profit organizations. Depreciation is discussed in FAS 93, Recognition of Depreciation by Not-for-Profit Organizations. FAS 99 is on Deferral of the Effective Date of Recognition of Depreciation by Not-for-Profit Organizations. FAS 116 discusses Accounting for Contributions Received and Contributions Made. Financial Statements of Not-for-Profit Organizations are dealt with in FAS 117. FAS 124 covers Accounting for Certain Investments Held by Not-for-Profit Organizations, and FAS 136 is Transfer of Assets to a Not-for-Profit Organization or Charitable Trust That Raises or Holds Contributions for Others.

Most everything an accountant needs to know can be found by studying the Statements of Financial Accounting Standards. Used with the other forms of GAAP, a complete picture should take shape and offer guidance. If your position on an issue is ever questioned, you can back it up with a SFAS.

If you need help with your general accounting, income taxes, or financial reporting, you are in the right place. Try out the CPA search feature on this website to find a qualified professional in your area to assist you with all your accounting and tax needs.

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