We are independent & ad-supported. We may earn a commission for purchases made through our links.
Advertiser Disclosure
Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.
How We Make Money
We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently of our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.

What is the Statement of Financial Accounting Concepts?

By Osmand Vitez
Updated May 16, 2024
Our promise to you
SmartCapitalMind is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At SmartCapitalMind, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject-matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

Statement of Financial Accounting Concepts (SFAC) is the document issued by the Financial Accounting Standards Board (FASB) relating to broad overviews of financial reporting concepts. These statements do not create new accounting principles; they simply provide accounting firms and certified public accountants (CPA) with information on common business or financial topics. FASB typically issues these statements as a precursor to developing and implementing actual financial accounting standards. These accounting concept statements can allow accounting educators and theorists an opportunity to comment or suggest changes to the concept statement prior to an accounting standard being written by FASB.

Because the accounting industry is governed by FASB, a private accounting organization, the industry has the important task of using self-governance when developing and implementing accounting standards. FASB Statement of Financial Accounting Concepts are intended to serve the public interest by setting objectives and goals for companies when recording and reporting financial information. The concept statements allow FASB to see how information is presented on financial statements and the public reaction relating to the new accounting concepts. Outside opinions from leaders in the accounting industry are an important influence for creating new accounting standards.

FASB has issued seven Statement of Financial Accounting Concepts since 1978. These SFACs cover topics including objectives of financial reporting, qualitative characteristics of accounting information, elements of financial statements (superseded), objectives of financial reporting by non-business organizations, recognition and measurement in financial statements, elements of financial statements (amendment statement) and using cash flow information and present value in accounting information. Each concept is stored on FASB’s website and can be viewed or referenced by accounting firms or CPAs for reference. These concepts also provide FASB with a starting point for the development process of new accounting standards.

FASB uses an extensive “due process” when developing new accounting principles. The Statement of Financial Accounting Concepts may be issued by FASB with the intent for public debate and comment. Outside opinions are reviewed by FASB and its governing partners to determine if a new accounting principle is needed based on the comments from outside individuals. If new accounting principles are needed, FASB then issues an Exposure Draft (ED), which may be based on recent Statement of Financial Accounting Concepts. This ED is then published for public comment; comments are reviewed and FASB may make changes to the ED. Once the ED is accepted by the accounting profession, FASB writes the new accounting principle.

SmartCapitalMind is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Discussion Comments
SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.

SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.