FASB and Legislation. The Financial Accounting Foundation's Board of Trustees has issued a statement opposing legislation that they believe would jeopardize FASB's ability to function as an independent standard setting body. This foundation appoints and funds FASB and the members are concerned about accounting rules being legislated rather than determined by FASB.

The Financial Accounting Standards Board (FASB), after extensive analysis and with careful public due process, issued a proposal on March 31, 2004 regarding accounting for employee stock options and other equity-based compensation. As Trustees of the Financial Accounting Foundation (FAF) we do not take positions on the FASB’s standards-setting proposals; we leave the complex task of accounting standards setting to the experts who comprise the FASB. However, we care deeply about the integrity and independence of the standards-setting process, which we believe is threatened by current legislative proposals.

We, therefore, strongly oppose any current or proposed legislation that would undermine the independence of the FASB by preempting, overriding, or delaying the FASB’s ongoing effort to improve accounting for equity-based compensation. We believe that once Congress starts setting accounting standards through its political process, the integrity of U.S. accounting standard setting and the credibility of U.S. financial reporting will be dangerously compromised.