Which of the following Statements of financial Accounting Concepts defines the 10 elements

What Is Statement of Financial Accounting Concepts?

The Statement of Financial Accounting Concepts (SFAC) was a document issued by the Financial Accounting Standards Board (FASB) covering broad financial reporting concepts. FASB is the organization that sets down the accounting rules and guidelines that make up Generally Accepted Accounting Principles (GAAP).

The purpose of the SFAC document is to provide a general overview of accounting concepts, definitions, and ideas. It is seen as a prelude to the Statement of Financial Accounting Standards (SFAS).

Both SFAC and SFAS has been superseded by the FASB Accounting Standards Codification, which became effective after September 2009. This codification is now updated via Accounting Standards Updates (ASUs) and FASB Concept Statements.

Key Takeaways

• The Statement of Financial Accounting Concept (SFAC) was an overview of accounting and financial reporting terms issued by the FASB.
• The goal has been to establish accounting standards and guidelines for best practices among accountants, bookkeepers, and organizations preparing financial statements.
• Since 2009, these documents have given way to new issuance of accounting updates including Accounting Standards Updates and FASB Concept Statements.

Understanding Statement of Financial Accounting Concepts

Setting accounting standards is an extensive process starts with research, public hearings, and public comment and ends with the issuing of a new accounting standard that then becomes part of GAAP. The SFAC is part of this process in that it is used as a blueprint for the future development of reporting policy and procedures.

In recent years there has been pressure to harmonize accounting standards around the world. The international equivalent of the US-based FASB is the International Accounting Standards Board (IASB). The IASB helps develop standards for countries that require the use of International Financial Reporting Standards (IFRS).

FASB and IASB initially hoped to develop a common set of standards that would be acceptable around the world. But this approach encountered some resistance, and they have settled on a compromise in which the FASB will remain the standard issuer for the United States but endorse IFRS rules and guidelines issued by IASB.

Statement of Financial Accounting Standards

Statement of Financial Accounting Standards, or SFASs, are closely related documents and were published to address specific accounting issues, with a view to enhancing the accuracy and transparency of financial reporting. There would often be a lengthy public consultation about the potential consequences of a rule change before an SFAS was published to update guidelines.

Once an SFAS was published, it became part of the FASB accounting standards, known as generally accepted accounting principles (GAAP), that govern the preparation of corporate financial reports and are recognized as authoritative by the Securities and Exchange Commission (SEC), which regulates American stock exchanges.

The FASB Concepts Statements are intended to serve the public interest by setting the objectives, qualitative characteristics, and other concepts that guide selection of economic phenomena to be recognized and measured for financial reporting and their display in financial statements or related means of communicating information to those who are interested. Concepts Statements guide the Board in developing sound accounting principles and provide the Board and its constituents with an understanding of the appropriate content and inherent limitations of financial reporting. A Statement of Financial Accounting Concepts does not establish generally accepted accounting standards.

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Concepts Statement No. 8
Conceptual Framework for Financial Reporting—Chapter 1, The Objective of General Purpose Financial Reporting
(Amended 12/2021 | Issued 09/2010)
[As Amended]  [As Issued] 
Amendments to Statement of Financial Accounting Concepts No. 8—Conceptual Framework for Financial Reporting—Chapter 1, The Objective of General Purpose Financial Reporting
(Issue 12/2021)

Concepts Statement No. 8
Conceptual Framework for Financial Reporting—Chapter 3, Qualitative Characteristics of Useful Financial Information
(Amended 08/2018 | Issued 09/2010)
[As Amended]  [As Issued] 
Amendments to Statement of Financial Accounting Concepts No. 8—Conceptual Framework for Financial Reporting—Chapter 3, Qualitative Characteristics of Useful Financial Information
(Issue Date 08/2018)

Concepts Statement No. 8
Conceptual Framework for Financial Reporting—Chapter 4, Elements of Financial Statements
(Issue Date 12/2021)
[As Issued]

Concepts Statement No. 8
Conceptual Framework for Financial Reporting—Chapter 7, Presentation
(Issue Date 12/2021)
[As Issued]

Concepts Statement No. 8
Conceptual Framework for Financial Reporting—Chapter 8, Notes to Financial Statements
(Amended 12/2021 | Issue Date 08/2018)
[As Amended] [As Issued]

Concepts Statement No. 7
Using Cash Flow Information and Present Value in Accounting Measurements
(Amended 12/2021 | Issued 02/2000)
[As Amended] [As Issued] [Status]

Concepts Statement No. 5
Recognition and Measurement in Financial Statements of Business Enterprises
(Amended 12/2021 | Issued 12/1984)
[As Amended] [As Issued] [Status]

Superseded Concepts Statements:

Concepts Statement No. 1  (Superseded)
Objectives of Financial Reporting by Business Enterprises
(Issue Date 11/1978)
[As Amended] [As Issued] [Status]

Concepts Statement No. 2 (Superseded)
Qualitative Characteristics of Accounting Information
(Issue Date 05/1980)
[As Amended] [As Issued] [Status]

Concepts Statement No. 3 (Superseded)
Elements of Financial Statements of Business Enterprises
(Issue Date 12/1980)
[As Amended] [As Issued] [Status]

Concepts Statement No. 4 (Superseded)
Objectives of Financial Reporting by Nonbusiness Organizations
(Issue Date 12/1980)
[As Amended] [As Issued] [Status]

Concepts Statement No. 6 (Superseded)
Elements of Financial Statements—a replacement of FASB Concepts Statement No. 3 (incorporating an amendment of FASB Concepts Statement No. 2)
(Issue Date 12/1985)
[As Amended] [As Issued] [Status]