Financial Accounting Foundation - FAF


DEFINITION of 'Financial Accounting Foundation - FAF'

An independent, private-sector organization that is mainly responsible for establishing and improving financial accounting and operating standards, and educating its constituents about those standards. The Financial Accouting Foundation has responsibility for the oversight, administration and finances of the Financial Accounting Standards Board (FASB), the Governmental Accounting Standards Board (GASB), and their advisory councils. It also selects the members of the boards and councils that set accounting standards, and protects their independence.

BREAKING DOWN 'Financial Accounting Foundation - FAF'

The FAF is a non-stock Delaware corporation established in 1972 that operates only for educational, charitable, scientific and literary purposes.

Because capital markets and governments consist of so many participants with competing demands and proprietary interests, independence is key to the activities of the FAF's standard-setting boards, the FASB and GASB. This independence allows them to provide objectivity and integrity to the U.S. financial reporting system. Because the FAF is an independent entity with no stakes in specific outcomes, the FAF's boards can make objective decisions on accounting standards without being swayed by industrial lobbying groups or political pressure.

  1. Credit Business Associate - CBA

    A designation awarded to those who show mastery in financial ...
  2. Auditing Standards Board - ASB

    The American Institute of Certified Public Accountants' (AICPA) ...
  3. National Association Of State Boards ...

    A U.S. nonprofit group founded in 1908 that seeks to enhance ...
  4. Government Accounting Standards ...

    An organization whose main purpose is to improve and create accounting ...
  5. Generally Accepted Auditing Standards ...

    A set of systematic guidelines used by auditors when conducting ...
  6. Generally Accepted Accounting Principles ...

    The common set of accounting principles, standards and procedures ...
Related Articles
  1. Markets

    Financial Statement Manipulation An Ever-Present Problem For Investors

    The SEC has taken steps to eliminate this type of corporate fraud, but it remains a real risk for investors.
  2. Retirement

    Navigating Government And Nonprofit Financial Statements

    Learn how to trace where your tax dollars and charitable donations are going.
  3. Insurance

    International Reporting Standards Gain Global Recognition

    Comparing financial numbers from corporations in different countries is possible with the adoption of IFRS.
  4. Professionals

    4 Must Watch Films and Documentaries for Accountants

    Learn how these must-watch movies for accountants teach about the importance of ethics in a world driven by greed and financial power.
  5. Active Trading

    An Introduction To Depreciation

    Companies make choices and assumptions in calculating depreciation, and you need to know how these affect the bottom line.
  6. Markets

    Operating Cash Flow: Better Than Net Income?

    Differences between accrual accounting and cash flows show why net income is easier to manipulate.
  7. Investing Basics

    How To Efficiently Read An Annual Report

    Annual reports are clearly prepared without any intent to deceive or mislead investors. Still, investors should read them with a dose of skepticism.
  8. Investing Basics

    Explaining Financial Statement Analysis

    Financial statement analysis is the process of reviewing a company’s statements to gain an understanding of its financial health.
  9. Investing Basics

    How Financial Statements Are Manipulated

    Financial statement manipulation is an ongoing problem, and investors who buy stocks or bonds should be aware of its signs and implications.
  10. Investing News

    Defensive Investing: Learn from a Hedge Fund Pro

    Looking for ideas on companies, sectors or investments to short? Consider the opinion of this hedge fund luminary.
  1. How does the Financial Accounting Standards Board (FASB) establish accounting protocol?

    Financial accounting protocol in the United States is largely based on a collaboration of three organizations: the Securities ... Read Full Answer >>
  2. What is the difference between IAS and GAAP?

    To answer this question, we must first define what IAS and GAAP are, in order to get a better grasp of the function they ... Read Full Answer >>
  3. Can working capital be depreciated?

    Working capital as current assets cannot be depreciated the way long-term, fixed assets are. In accounting, depreciation ... Read Full Answer >>
  4. Do working capital funds expire?

    While working capital funds do not expire, the working capital figure does change over time. This is because it is calculated ... Read Full Answer >>
  5. How much working capital does a small business need?

    The amount of working capital a small business needs to run smoothly depends largely on the type of business, its operating ... Read Full Answer >>
  6. What does high working capital say about a company's financial prospects?

    If a company has high working capital, it has more than enough liquid funds to meet its short-term obligations. Working capital, ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Barefoot Pilgrim

    A slang term for an unsophisticated investor who loses all of his or her wealth by trading equities in the stock market. ...
  2. Quick Ratio

    The quick ratio is an indicator of a company’s short-term liquidity. The quick ratio measures a company’s ability to meet ...
  3. Black Tuesday

    October 29, 1929, when the DJIA fell 12% - one of the largest one-day drops in stock market history. More than 16 million ...
  4. Black Monday

    October 19, 1987, when the Dow Jones Industrial Average (DJIA) lost almost 22% in a single day. That event marked the beginning ...
  5. Monetary Policy

    Monetary policy is the actions of a central bank, currency board or other regulatory committee that determine the size and ...
  6. Indemnity

    Indemnity is compensation for damages or loss. Indemnity in the legal sense may also refer to an exemption from liability ...
Trading Center