According to the FASB, some industry representatives have complained that current accounting standards are too difficult to use and too costly to implement. Others contend an overly detailed standard allows for the structuring of a transaction that meets the literal requirements of the rule, but ignores its intent and spirit.
Also, the recently enacted Sarbanes-Oxley Act requires the Securities and Exchange Commission (SEC) to look into the principles-based system approach. FASB said its staff worked with the SEC to prepare the FASB proposal.
FASB officials said they invite public comment on their proposal by January 3, 2003 and will hold a discussion of the topic on December 16.
The proposal is available on the FASB Web site .