FASB Standards Overload: A Historical Perspective and Genesis of An Ongoing Issue

Since the FASB’s Inception in 1973, they have created a plethora of standards and updates leading to a voluminous body of promulgation.  Because of the eagerness of Board members to solve reporting issues, tackle current matters, and meet the needs of investors and financial statement users; a great deal of guidance has been and continues to be issued by FASB.  Preparers and users have continually spoken out about standards becoming too unwieldy.  Almost from the beginning, the FASB has been criticized for creating too many standards, too fast, that are complex, irrelevant, and redundant.  Throughout its history, FASB has attempted to respond to this criticism through various simplification projects.  This paper explores standards overload, claims of loss of relevance, and projects intended to address standards overload.  Such projects include the Codification of 2009 and FASB’s current Codification Improvement evergreen undertaking.  This research particularly provides an in-depth examination of the 1978 – 1983 Extraction Project, which codified important facets of AICPA standards.  It was intended to help control the proliferation of standards being issued by other bodies, but became the first of a long history of standards overload criticisms of FASB.