The Financial Accounting Standards Board, or FASB, is an independent, non-profit organization which establishes the financial accounting standards used by companies in the preparation of financial reports.
Generally Accepted Accounting Principles, or GAAP, is a set of standards used by companies in the preparation of financial statements such as the balance sheet, income statement, and statement of cash flows. The standards established by the Financial Accounting Standards Board are deemed as authoritative to agencies such as the Securities and Exchange Commission.
The FASB has been establishing accounting standards since 1973. The process begins with a research effort that involves an accounting issue, and ends with an authoritative statement that outlines the proper reporting of this financial information.
The creation of standards and guidelines ensures consistent information is reported, which provides the users of financial reports with actionable information. The FASB works in conjunction with a number of independent business and professional organizations, including the Financial Accounting Foundation (Foundation), the Financial Accounting Standards Advisory Council (FASAC), the Governmental Accounting Standards Board (GASB), and the Governmental Accounting Standards Advisory Council (GASAC).