Define: Accounting Principles Board

The Accounting Principles Board (APB) was a private organisation that existed from 1959 to 1973. It was established by the American Institute of Certified Public Accountants (AICPA) to develop and issue authoritative accounting principles and standards.

The APB was responsible for setting accounting standards in the United States during its existence. It issued a series of opinions that provided guidance on various accounting issues, including revenue recognition, inventory valuation, and financial statement presentation.

However, the APB faced criticism for its slow and bureaucratic decision-making process, as well as its lack of independence from the AICPA. As a result, the Financial Accounting Standards Board (FASB) was established in 1973 to replace the APB.

The FASB took over the responsibility of setting accounting standards and became the primary standard-setting body in the United States. It operates under the oversight of the Financial Accounting Foundation (FAF) and is responsible for issuing the Generally Accepted Accounting Principles (GAAP).

In summary, the Accounting Principles Board was a predecessor to the FASB and played a significant role in developing accounting principles and standards in the United States. However, it was replaced by the FASB due to concerns about its decision-making process and lack of independence.

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This glossary post was last updated: 29th March 2024.