Exposure Draft

DEFINITION of 'Exposure Draft'

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.

BREAKING DOWN 'Exposure Draft'

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.