The FASB has taken an asset/liability approach in setting standards. With this approach, a transaction is recorded based on whether an asset or liability is created. Another trend has been the movement toward the use of fair valu
In recent years, what
has been the FASB’s approach to standard setting?
A.
The FASB has taken an asset/liability approach in setting standards. With this approach, a transaction is recorded based on whether an asset or liability is created. Another trend has been the movement toward the use of fair value measurements as an alternative to historical cost. FASB has also focused on the promulgation of principles-based standards instead of rules-based standards.
B.
The FASB has taken an income statement approach in setting standards. With this approach, a transaction is recorded based on revenue recognition criteria. Another trend has been the movement toward the use of historical cost as an alternative to fair value measurement. FASB has also focused on the promulgation ofprinciples-based standards instead of rules-based standards.
C.
The FASB has taken a historical cost approach in setting standards. With this approach, historical cost is the amount cash (or equivalent) that was paid to acquire an asset or received when a liability was incurred. Another trend has been the movement toward the use of fair value measurements as an alternative to historical cost. FASB has also focused on the promulgation of rules-based standards instead of principles-based standards.
D.
The FASB has taken a cash flow approach in setting standards. With this approach, a transaction is recorded based on whether it creates an increase or decrease in cash. Another trend has been the movement toward the use of historical cost as an alternative to fair value measurement. FASB has also focused on the promulgation of rules-based standards instead of principles-based standards.
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