FASB’s Simplification of Income Statement Presentation
The Financial Accounting Standards Board (FASB) is a non-profit organization. Their
purpose is to make accounting principles and improve older ones. They create standards for all
accounting companies, private and non-private, across America that follow the general
guidelines, also known as the Generally Accepted Accounting Principles (GAAP). They are
recognized by the SEC (Securities and Exchange Commission) as the ones who set the standards
for accounting. Therefore, their goal to nullify the “Extraordinary items” part of the Income
statement to simplify it has a great impact on the entire accounting world.
Extraordinary items used to be on the income statement and are categorized by two
situations: Unusual nature and infrequency of occurrence. Unusual nature is defined by
something that’s very abnormal and is caused by something unrelated to the businesses usual
