What is an APB Opinion

An APB opinion is an authoritative pronouncement issued by the Accounting Principles Board. The official opinions were given on various accounting issues that required clarification or interpretation. The APB listed 31 separate opinions during its existence from 1962 to 1973. The board was created by the American Institute of Certified Public Accountants (AICPA), and was replaced by Financial Accounting Standards Board (FASB) in 1973. Its mission was to develop an overall conceptual framework of U.S. generally accepted accounting principles (U.S. GAAP). APB was the main organization setting the U.S. GAAP, and its opinions are still an important part of it.


After the Accounting Principles Board was replaced by the Financial Accounting Standards Board (FASB), the APB opinions were also superseded by GAAP. Therefore, they are now essentially obsolete. The APB was disbanded in the hopes that the smaller, fully independent FASB could more effectively create accounting standards. The APB and the related Securities Exchange Commission (SEC) were unable to operate completely independently of the U.S. government. In a scholarly article in 1973, John C. Burton wrote that the SEC's opinion about the APB was that its overall record was a reasonably good one, but it seemed likely that a smaller full-time body more directly in control of its research would ultimately have a greater promise for success.

Of the APB's 31 opinions and four statements several were instrumental in improving the theory and practice of significant areas of accounting. Many have been superseded by FASB pronouncements; 19 opinions still stand as part of GAAP. Some of the 31 opinions include providing guidance related to the disclosure of accounting principles in financial statements in April 1972; Also that month, an opinion for accounting for income taxes —established accounting and reporting guidelines for subsidiaries, and intangible development costs; in October 1972, an opinion established accounting and reporting guidelines for stock provided as compensation to employees; also that month, the APB issued guidelines for accounting for the differences between debt issues; and in May 1972, APB clarified accounting principles related to interim financial reporting.