(GAAP and Economic Consequences) The following letter was sent to the SEC and the FASB by leaders of the business community.
Answer the following questions.
(a) Explain the “due process” procedures followed by the FASB in developing a financial reporting standard.
(b) What is meant by the term “economic consequences” in accounting standard-setting?
(c) What economic consequences arguments are used in this letter?
(d) What do you believe is the main point of the letter?
(e) Why do you believe a copy of this letter was sent by the business community to influential members of the U.S. Congress?
USING YOUR JUDGMENT