Reliability: Financial data needs to be trustworthy. It must be truthful, corroborated, and impartial. Investors can choose to invest in businesses with confidence with the use of trustworthy information. Comparability: It is necessary for financial data to be similar. Investors must be able to compare the financial statements of other companies thanks to the manner it is presented. Comparability aids in the decision-making process for investors when buying stocks in businesses. Consistency: Financial data needs to be consistent. It needs to be presented consistently from one time period to the next. Making consistent choices enables investors to choose firms wisely. The FASB’s mission is to develop and maintain accounting standards to guarantee the accuracy, dependability, and consistency of financial statements. To make sure that financial statements give investors valuable information, the FASB establishes accounting standards. The FASB also strives to lower compliance costs for businesses and increase the effectiveness of financial reporting.
To sum up, the FASB Quizlet is a helpful resource for accounting professionals and students to learn about GAAP. Relevance, dependability, comparability, and consistency are the four tenets of GAAP. The FASB establishes accounting rules to guarantee the accuracy, consistency, and dependability of financial accounts. The FASB seeks to increase the effectiveness of financial reporting and lower compliance costs for businesses.