What does the Financial Accounting Standards Board (FASB) define?

The Financial Accounting Standards Board (FASB) is an authoritative body that establishes and maintains generally accepted accounting principles (GAAP) specifically for private sector entities in the United States. This includes corporations, partnerships, and other types of private organizations that prepare financial statements for external use.

FASB's role is crucial for ensuring consistency and transparency in financial reporting, which is vital for investors, creditors, and other stakeholders who rely on accurate financial information to make informed decisions. The standards set by FASB encompass a wide range of financial reporting topics, from revenue recognition to accounting for assets and liabilities, thereby creating a comprehensive framework that governs the financial reporting process for private sector entities.

While the other options pertain to different aspects of accounting and regulatory standards, they fall outside the specific scope established by FASB. For example, the financial practices for governmental units are typically set by other bodies such as the Governmental Accounting Standards Board (GASB), and international accounting standards are governed by the International Accounting Standards Board (IASB). Similarly, tax regulations are handled by entities like the Internal Revenue Service (IRS) and are not within the purview of FASB.