Exposure Draft

A A A

DEFINITION

A document released by the Financial Accounting Standards Board (FASB) for public commentary on proposed new accounting standards. Since changes in accounting standards can have far reaching effects, it is important to consider public feedback to ensure that unintended consequences from new standards can be minimized.

INVESTOPEDIA EXPLAINS

Generally, those who comment on the exposure drafts are practicing accountants who are familiar with the practical impact than new standards would have based on their experience in dealing with similar issues at their firms or with their clients. FASB is able to revise the proposed standards based on the information it receives from comment letters before it issues a formal pronouncement to implement the new standards.


RELATED TERMS
  1. Accountant International Study ...

    An organization that studied the differences in accounting practices between ...
  2. International Accounting Standards ...

    An older set of standards stating how particular types of transactions and other ...
  3. Statement of Financial Accounting ...

    A document issued by the Financial Accounting Standards Board (FASB) covering ...
  4. Generally Accepted Accounting Principles ...

    The common set of accounting principles, standards and procedures that companies ...
  5. Financial Accounting Standards ...

    A seven-member independent board consisting of accounting professionals who ...
  6. Earnings Per Share - EPS

    The portion of a company's profit allocated to each outstanding share of common ...
  7. Billing Cycle

    The interval of time during which bills are prepared for goods and services ...
  8. Amortization

    1. The paying off of debt in regular installments over a period of time. 2. ...
  9. Price-To-Cash-Flow Ratio

    The ratio of a stock’s price to its cash flow per share. The price-to-cash-flow ...
  10. Contra Liability Account

    A liability account that is debited in order to offset a credit to another liability ...
Related Articles
  1. The Importance Of Corporate Transparency
    Investing Basics

    The Importance Of Corporate Transparency

  2. Material Adverse Effect A Warning Sign ...
    Markets

    Material Adverse Effect A Warning Sign ...

  3. An Investor's Checklist To Financial ...
    Options & Futures

    An Investor's Checklist To Financial ...

  4. Navigating Government And Nonprofit ...
    Retirement

    Navigating Government And Nonprofit ...

  5. International Reporting Standards Gain ...
    Insurance

    International Reporting Standards Gain ...

  6. Free On Board
    Professionals

    Free On Board

  7. An Introduction To The CMA Designation
    Professionals

    An Introduction To The CMA Designation

  8. Top 4 Most Competitive Financial Careers
    Professionals

    Top 4 Most Competitive Financial Careers

  9. Operating Profit
    Investing

    Operating Profit

  10. Current Assets
    Investing Basics

    Current Assets

comments powered by Disqus
Hot Definitions
  1. National Best Bid and Offer - NBBO

    A term applying to the SEC requirement that brokers must guarantee customers the best available ask price when they buy securities and the best available bid price when they sell securities.
  2. Maintenance Margin

    The minimum amount of equity that must be maintained in a margin account. In the context of the NYSE and FINRA, after an investor has bought securities on margin, the minimum required level of margin is 25% of the total market value of the securities in the margin account.
  3. Leased Bank Guarantee

    A bank guarantee that is leased to a third party for a specific fee. The issuing bank will conduct due diligence on the creditworthiness of the customer looking to secure a bank guarantee, then lease a guarantee to that customer for a set amount of money and over a set period of time, typically less than two years.
  4. Degree Of Financial Leverage - DFL

    A ratio that measures the sensitivity of a company’s earnings per share (EPS) to fluctuations in its operating income, as a result of changes in its capital structure. Degree of Financial Leverage (DFL) measures the percentage change in EPS for a unit change in earnings before interest and taxes (EBIT).
  5. Jeff Bezos

    Self-made billionaire Jeff Bezos is famous for founding online retail giant Amazon.com.
  6. Re-fracking

    Re-fracking is the practice of returning to older wells that had been fracked in the recent past to capitalize on newer, more effective extraction technology. Re-fracking can be effective on especially tight oil deposits – where the shale products low yields – to extend their productivity.
Trading Center