ACCOUNTING PRINCIPLES BOARD Meaning and
Definition
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The Accounting Principles Board (APB) was a private body established in 1959 by the American Institute of Accountants (now known as the American Institute of Certified Public Accountants) to develop and improve accounting principles in the United States. The APB aimed to establish a cohesive set of standards and procedures that would guide the preparation and presentation of financial statements for public and private entities.
The primary role of the APB was to issue authoritative pronouncements on accounting principles, known as APB Opinions. These opinions provided guidance on topics such as revenue recognition, cost measurement, and financial statement presentation. The APB would evaluate existing practices and issues related to accounting and recommend changes or improvements to ensure consistency and comparability in financial reporting.
Accounting principles established by the APB were intended to be universally accepted and followed by all entities in order to enhance transparency, provide reliable information to stakeholders, and facilitate meaningful comparisons of financial statements. However, in 1973, the APB was disbanded due to criticism that it had failed to address emerging issues and adapt to changes in the business environment.
Following the dissolution of the APB, the Financial Accounting Standards Board (FASB) was established as the successor body in 1973. The FASB continues to govern accounting standards in the United States today, issuing its pronouncements known as Generally Accepted Accounting Principles (GAAP).
