Glossary term
Accounting Principles Board
The Accounting Principles Board was the AICPA body that issued accounting opinions before the FASB became the U.S. private-sector standard setter.
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What Was the Accounting Principles Board?
The Accounting Principles Board, or APB, was the body within the accounting profession that issued authoritative accounting opinions before the Financial Accounting Standards Board became the main U.S. private-sector standard setter. It is mainly relevant today because older accounting literature, textbooks, and financial reporting history may still refer to APB Opinions.
The APB is not the current standard setter. Modern U.S. GAAP research generally starts with the FASB Accounting Standards Codification and, for public companies, relevant SEC rules and guidance.
Key Takeaways
- The Accounting Principles Board was a predecessor standard-setting body in U.S. accounting.
- It issued APB Opinions and related accounting guidance before FASB took over the standard-setting role.
- FASB was established in 1973 and became the recognized private-sector body for U.S. financial accounting standards.
- Some older accounting references still mention APB Opinions.
- Readers should check current Codification guidance rather than relying on old APB citations by themselves.
How the APB Fit Into Accounting History
The APB operated during a period when the accounting profession was trying to create more consistent financial reporting guidance. Its opinions addressed issues such as business combinations, income taxes, leases, pensions, and extraordinary items, among other topics.
The standard-setting structure changed in the early 1970s. FASB was established as an independent private-sector board, and the Accounting Principles Board went out of business in 1973. That shift was part of a broader move toward a more independent and systematic standard-setting process.
Why APB References Still Appear
APB references still appear because accounting standards evolve over long periods. Older financial statements, audit materials, academic writing, and historical discussions may cite APB Opinions. Some old guidance was later superseded, amended, carried forward, or incorporated into later accounting literature.
That does not mean the old citation is enough for current reporting. A historical APB reference should be treated as a clue to research the current rule, not as the final answer.
APB Versus FASB
Body | Role | Current relevance |
|---|---|---|
Accounting Principles Board | Former body that issued accounting opinions before FASB's role became established. | Important mainly for historical references and older accounting literature. |
Financial Accounting Standards Board | Current private-sector standard setter for U.S. GAAP for public and private companies and not-for-profit organizations. | Central to current U.S. GAAP standard setting. |
FASB Codification | Organizes authoritative U.S. GAAP for nongovernmental entities. | Primary starting point for current GAAP research. |
How to Read an Old APB Citation
If a document cites an APB Opinion, the practical step is to find the current accounting treatment. The old opinion may have been replaced, partially superseded, or reorganized into the Codification. The business question may still be relevant, but the authoritative path may have changed.
For investors, the APB usually matters only when reading older disclosures or understanding why an accounting rule developed. For accountants, it is a reminder that citations need to be updated before being used in current work.
The Bottom Line
The Accounting Principles Board was an important predecessor to FASB in U.S. accounting standard setting. Its legacy appears in older accounting literature, but current financial reporting analysis should rely on current GAAP and applicable SEC requirements.