FASB Staff Position was a form of accounting guidance issued by the staff of the Financial Accounting Standards Board to address specific questions or clarify how existing U.S. GAAP requirements should be applied. Although the term is now largely associated with older accounting literature, understanding FASB Staff Positions remains useful because accountants, auditors, researchers, and students may still encounter FSP references in historical financial statements, technical accounting papers, and older accounting guidance.
What Is a FASB Staff Position?
A FASB Staff Position, commonly abbreviated as FSP, was designed to deal with particular accounting questions that arose under existing FASB standards. Rather than creating an entirely new accounting framework, an FSP could amend, clarify, or provide guidance related to an existing pronouncement.
FSPs covered a wide range of technical accounting subjects. Depending on the specific position, the guidance could address areas such as financial instruments, fair value measurements, employee benefits, intangible assets, income taxes, leases, and other financial reporting matters. For example, FASB issued FSP FAS 142-3 concerning the determination of the useful life of intangible assets.
The practical value of an FSP was that it could respond to a narrowly defined accounting issue without requiring accountants to interpret an entire standard from scratch. This made individual positions particularly relevant when a company encountered a transaction or reporting situation that was not sufficiently clear from the existing literature.
Why Did FASB Issue Staff Positions?
Financial reporting often involves situations that were not fully anticipated when an accounting standard was originally written. New transactions, changes in business practices, regulatory developments, and questions from preparers and auditors can expose areas where additional clarification is needed.
FASB Staff Positions provided a way to address some of these issues within the existing body of accounting literature. An FSP could modify particular paragraphs, add requirements, or clarify how an existing rule should be applied to a specific situation.
For instance, FSP FAS 157-1 addressed the application of FASB Statement No. 157 to certain lease classification and measurement questions. FASB records show that it amended provisions of FAS 13 and FAS 157 in connection with this issue.
How Did FASB Staff Positions Affect Accounting?
The effect of an FSP depended on the particular guidance it contained. Some positions changed how an existing accounting requirement was interpreted, while others directly amended provisions of an existing FASB Statement.
An important point is that an FSP was not necessarily a broad accounting standard covering an entire topic. Instead, it typically focused on a defined issue. This narrower approach allowed technical problems to be addressed without rewriting an entire accounting pronouncement.
The impact could nevertheless be significant. An FSP might affect recognition, measurement, presentation, disclosure, transition, or effective dates. FSP FAS 109-2, for example, provided accounting and disclosure guidance related to the foreign earnings repatriation provision of the American Jobs Creation Act of 2004.
Examples of FASB Staff Positions
There were many FASB Staff Positions covering different areas of U.S. accounting. Their titles provide a useful picture of the types of questions that FASB addressed through this form of guidance.
FSP FAS 142-3 is one notable example. It addressed the determination of the useful life of intangible assets and amended several paragraphs of FASB Statement No. 142. The FASB records show an effective date for fiscal years beginning after December 15, 2008, with interim periods within those fiscal years.
Another example is FSP FAS 140-4/FIN 46(R)-8, which dealt with disclosures by public entities concerning transfers of financial assets and interests in variable interest entities. The FASB status page records that the position affected provisions of FAS 140 and FIN 46(R), and that it was later superseded by FAS 166 and FAS 167.
FSP FAS 150-1 is another historical example. It addressed an issuer’s accounting for certain freestanding financial instruments composed of more than one option or forward contract under FASB Statement No. 150.
FASB Staff Position and the Accounting Standards Codification
One of the biggest changes in U.S. accounting literature was the development of the FASB Accounting Standards Codification. The Codification reorganized authoritative U.S. GAAP into a more centralized and topic-based structure.
Because of this transition, accountants today should be careful when they encounter an older FSP reference. A historical FSP may no longer be the operative source of accounting guidance. Later standards and Accounting Standards Updates may have superseded, amended, or incorporated the relevant requirements.
The FASB’s own historical records illustrate this transition. For example, FSP FAS 140-4/FIN 46(R)-8 is identified as superseded by FAS 166 and FAS 167, while FSP FAS 141-1/142-1 was later superseded by FAS 141(R).
Are FASB Staff Positions Still Used Today?
The term FASB Staff Position is primarily encountered in historical accounting research rather than as the main format for new authoritative U.S. GAAP guidance. Modern accounting research generally requires users to determine the relevant topic and paragraph within the current Accounting Standards Codification.
This distinction matters when reviewing older audit files, financial statements, accounting memoranda, or technical publications. An old document may cite an FSP because that was the applicable literature when the transaction was analyzed.
However, finding an FSP reference does not automatically mean that the guidance remains effective. Accountants need to check its status and identify subsequent standards or amendments that may have changed the accounting treatment. FASB’s historical pages explicitly identify the status and subsequent effects of numerous FSPs.
How to Research an Old FASB Staff Position
When you encounter an FSP reference, start by identifying its exact designation. The number is important because FSPs were generally associated with a particular FASB Statement or FIN. For example, FSP FAS 142-3 is different from FSP FAS 157-1, even though both belong to the same general family of historical guidance.
Next, review the original FSP and determine what accounting issue it addressed. Look for sections covering the effective date, affected literature, amendments, transition requirements, and subsequent changes.
Finally, check whether the guidance was later superseded or incorporated into another accounting standard. This final step is particularly important because relying on historical guidance without checking its current status can lead to an incorrect conclusion under U.S. GAAP.
Why FASB Staff Positions Still Matter
FASB Staff Positions remain relevant for anyone researching the development of U.S. accounting standards. They show how specific accounting problems were handled before the current Codification structure became the primary reference point.
They can also help explain why older financial statements were prepared in a particular way. An auditor or accountant reviewing historical records may encounter an FSP citation and need to understand the original requirement before tracing it to subsequent guidance.
Most importantly, FSPs demonstrate that accounting standards evolve over time. A position that once addressed a specific reporting problem may later be replaced by a broader accounting standard. Understanding that progression helps professionals distinguish historical accounting treatment from the guidance that applies to current reporting.
Conclusion
FASB Staff Position refers to a historical form of guidance used by FASB staff to address specific accounting questions and modify or clarify existing U.S. GAAP requirements. FSPs covered numerous subjects, including intangible assets, financial instruments, fair value, income taxes, and disclosures.
Although many FSPs have been superseded by later standards and the modern Accounting Standards Codification, they remain valuable when researching historical accounting practices. When an older FSP appears in accounting records, the safest approach is to identify the original guidance, review its status, and trace any subsequent amendments or replacement standards before relying on it.
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FAQs
What does FASB Staff Position mean?
FASB Staff Position refers to guidance issued by FASB staff to address specific accounting questions or clarify existing U.S. GAAP requirements.
Is a FASB Staff Position still authoritative today?
Many historical FSPs have been superseded or incorporated into later accounting literature, so their current status must be checked before relying on them.
What is an example of an FASB Staff Position?
FSP FAS 142-3 addressed the determination of the useful life of intangible assets and amended provisions of FASB Statement No. 142.
How are FSPs related to U.S. GAAP?
FSPs were part of the historical body of U.S. accounting literature and could amend or clarify existing FASB requirements.
Where should accountants look for current guidance?
Accountants should generally consult the current FASB Accounting Standards Codification and verify whether an older FSP has been superseded or replaced.
