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Prior to 2009, the FASB Issued Several Types of Pronouncements

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Essay

Prior to 2009, the FASB issued several types of pronouncements which had differing levels of authority. Explain the differing types of pronouncements, provide a brief explanation as to what changed after 2009 and why is it still important today?


Definitions:

Prevention Cost

Expenditures incurred to avoid defects in products or services, including costs associated with quality planning and assurance.

Rework Costs

Rework costs are expenses associated with fixing defective products or correcting service delivery errors to meet customer specifications or quality standards.

Scrap Costs

The costs associated with the disposal or recycling of materials that are not part of finished products.

Product-Level Activity

This refers to costs and activities associated with specific products, separate from the overall operation of a company.

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