What Is an Exposure Draft?
An exposure draft is a document published by the Financial Accounting Standards Board (FASB) to solicit public comment on a proposed new accounting standard, to minimize any unintended consequences before it becomes law.
Understanding Exposure Draft
The exposure draft represents the FASBs considered judgment on a specific accounting issue. Comment is most likely to be forthcoming from professional accounting firms and industry associations, with intimate knowledge of how the new standard would affect their clients. Based on the information it receives from comment letters, the FASB may revise the exposure draft before it becomes a Statement of Position and, eventually, a mandatory Financial Accounting Standard (FAS).