FASB Staff Position: What It Means and How to Use It Today

FASB Staff Position: Meaning, Examples and Current Status

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A FASB staff position (FSP) was a formal accounting pronouncement that addressed specific issues under the historical U.S. generally accepted accounting principles (GAAP) framework. These documents clarified or amended existing accounting requirements before the Financial Accounting Standards Board introduced its Accounting Standards Codification.

The FASB Accounting Standards Codification (ASC) became the authoritative source of nongovernmental U.S. GAAP for interim and annual periods ending after September 15, 2009. The previous accounting standards were superseded under the new framework.

Understanding an FASB staff position remains useful when researching older financial statements, historical accounting decisions, or archived technical documents. However, an old FSP should not automatically be treated as the final authority for a current accounting conclusion.

This guide explains what FSPs were, why they mattered, notable examples, and how to locate the applicable accounting guidance today.

Table of Contents

What Is a FASB Staff Position?

A FASB staff position was a formal pronouncement that addressed a particular accounting issue within the pre-Codification U.S. GAAP framework.

FSPs could clarify existing requirements or amend particular aspects of previously issued accounting standards. They addressed practical questions that arose when organizations applied accounting principles to financial reporting situations.

For example, FSP FAS 157-4 addressed fair value measurements when market activity had declined significantly. FSP FAS 115-2 and FAS 124-2 addressed the recognition and presentation of certain other-than-temporary impairments involving debt securities.

These documents were more than informal staff opinions. Under the historical GAAP hierarchy described in FASB Statement No. 162, FSPs belonged to category (a), alongside FASB Statements and Interpretations.

Today, researchers generally encounter FSPs in historical accounting literature, archived standards, older financial statements, and technical accounting research.

The original documents remain useful for understanding historical requirements. Their current relevance, however, depends on the applicable Codification provisions and any subsequent amendments.

Why Were FASB Staff Positions Needed?

Before the Codification, authoritative accounting guidance appeared across multiple documents, including FASB Statements, Interpretations, Technical Bulletins, and Staff Positions.

This structure made accounting research more complicated. A single reporting issue could require professionals to consult several documents to understand the applicable requirements.

A broad accounting standard might establish a general principle without resolving every practical question. An FSP could address a narrower issue or amend a particular requirement without replacing the entire underlying standard.

Fair value measurement provides a useful example. FASB Statement No. 157 established a framework for measuring fair value. FSP FAS 157-4 subsequently addressed measurement challenges when market activity declined significantly.

The Codification reorganized the existing accounting literature into a topic-based structure. Instead of relying primarily on separate historical pronouncements, professionals could research related requirements within the relevant accounting topic.

This change made accounting research more systematic and established a central source for authoritative nongovernmental U.S. GAAP.

Are FASB Staff Positions Still Authoritative?

FASB Staff Positions are historical pronouncements and are not independently authoritative under the current Codification framework.

The Codification launched on July 1, 2009, and became effective for interim and annual periods ending after September 15, 2009. It superseded the previous levels of U.S. GAAP issued by standard setters.

However, superseding an original document does not necessarily mean that every accounting principle it addressed was discarded. Relevant requirements were reorganized into the Codification, although individual provisions could also be amended or superseded.

Three distinctions are important:

Historical authority: An FSP could establish authoritative accounting requirements under the former GAAP hierarchy.
Continuing substance: Some requirements addressed by an FSP became part of the Codification.
Current application: The relevant ASC guidance may have changed through subsequent amendments.

The distinction also matters for public companies. The Codification is the authoritative source of nongovernmental U.S. GAAP recognized by FASB, apart from applicable SEC-issued rules and regulations. Public-company reporting may require consulting those SEC sources separately.

FASB also identifies limited grandfathered material for which original standards can remain relevant. Therefore, historical research should consider the particular reporting period and applicable exceptions.

For current accounting decisions, consult the relevant ASC requirements, applicable SEC guidance, and effective-date provisions rather than relying solely on an archived FSP.

How to Read an FSP Number

An FSP identifier helps researchers locate the correct historical accounting document.

Consider FSP FAS 157-4:

FSP: Identifies the document as a FASB Staff Position.
FAS 157: Connects the document to FASB Statement No. 157.
4: Distinguishes that position from other Staff Positions associated with the same statement.

FASB’s historical records list several positions associated with Statement No. 157, including FSP FAS 157-1 through FSP FAS 157-4.

Another example is FSP FAS 115-2 and FAS 124-2. This combined identifier refers to one pronouncement addressing requirements associated with both underlying standards.

When searching an archive, use the complete identifier and document title. Similar identifiers can refer to different pronouncements, proposals, or historical versions.

Always confirm that the document you find is the final issued version rather than a proposed amendment or secondary discussion.

For more insights, read our previous article: DAFO Analysis: What It Means and How to Use It

Important FASB Staff Position Examples

FSP FAS 157-4: Fair Value in Inactive Markets

FSP FAS 157-4 addressed fair value measurements when the volume and level of activity in a market had declined significantly.

The guidance considered how to evaluate market transactions under disrupted conditions, including whether particular transactions were orderly.

A decline in market activity did not automatically make every transaction irrelevant. Similarly, an unusually low transaction price did not automatically establish that the transaction was distressed.

Consider a company measuring an investment after trading activity falls sharply. The company must evaluate the available market evidence and determine whether the transactions provide appropriate evidence of fair value under the applicable requirements.

The central issue was how to measure fair value using available evidence, not whether management could simply substitute its preferred valuation for market-based information.

Today, this FSP is useful for historical research. Current fair value questions should be addressed using the applicable requirements in ASC Topic 820 and any relevant amendments.

FSP FAS 115-2 and FAS 124-2: Investment Impairment

FSP FAS 115-2 and FAS 124-2 addressed the recognition and presentation of certain other-than-temporary impairments, particularly those involving debt securities.

The pronouncement addressed the distinction between credit-related losses and other impairment amounts under the historical framework.

Its historical importance does not make it a complete guide to current investment accounting. FASB subsequently issued Accounting Standards Update 2016-13, introducing Topic 326 and the current expected credit losses (CECL) methodology for relevant financial assets.

Available-for-sale debt securities are subject to a distinct credit-loss model within ASC 326-30.

This example demonstrates why researchers must go beyond identifying an old FSP. They must also determine which current Codification provisions apply and whether later amendments changed the original requirements.

FSP FAS 117-1: Not-for-Profit Endowments

FSP FAS 117-1 addressed endowments held by not-for-profit organizations.

Its provisions included net asset classification for certain funds subject to an enacted version of the Uniform Prudent Management of Institutional Funds Act, along with enhanced endowment disclosures.

This example illustrates the range of accounting issues covered by historical Staff Positions. FSPs were not limited to financial instruments or fair value measurement; their scope depended on the particular accounting problem.

Researchers examining historical not-for-profit financial statements may therefore encounter these documents when investigating endowment classification and disclosure practices.

FSP vs. ASC vs. ASU

FSP, ASC, and ASU refer to different elements of the accounting literature. They should not be treated as interchangeable terms.

Term	Meaning	Purpose
FSP	FASB Staff Position	Historical pronouncement from the pre-Codification framework
ASC	Accounting Standards Codification	Authoritative source of nongovernmental U.S. GAAP recognized by FASB
ASU	Accounting Standards Update	Communicates amendments to the Codification and explains related changes

The most important distinction is between ASC and ASU.

The ASC contains the authoritative accounting requirements. An ASU explains how FASB has amended the Codification, why the changes were made, and when they become effective.

An ASU is not independently authoritative in its own right. The applicable Codification provisions establish the accounting requirements.

For current technical research, use the relevant ASC paragraphs as the primary reference. Consult the corresponding ASU for background, transition guidance, and effective dates. Use an FSP when historical context is relevant to the issue.

How to Find the Current Guidance Behind an FSP

A reliable research process connects the historical document with the accounting requirements applicable to the reporting period.

1. Confirm the Exact Historical Document

Record the complete FSP identifier, title, and relevant paragraph numbers.

Check the original document against FASB’s pre-Codification standards archive. Confirm that you are using the final issued pronouncement rather than a proposal or secondary summary.

2. Locate the Related Codification Guidance

Use FASB’s available Codification resources and cross-reference information to identify the relevant accounting topic, subtopic, section, and paragraph.

Do not assume that every provision in an FSP moved into one single Codification location. Different requirements may relate to different topics or sections.

3. Review the Scope

Read the scope provisions before relying on a particular accounting rule.

Some requirements apply only to certain instruments, transactions, or types of entities. A paragraph that appears relevant may not apply to the facts under review.

4. Check Subsequent Amendments and Effective Dates

Review relevant ASUs, transition provisions, and effective dates. A historical cross-reference can help locate the original guidance, but it does not establish that the wording remains unchanged.

For historical financial statements, identify the accounting requirements that applied during the reporting period. For current financial reporting, use the applicable guidance and effective amendments.

5. Document the Accounting Conclusion

A well-supported research memo should identify:

The transaction and reporting period.
The historical FSP and relevant paragraphs.
The applicable ASC paragraphs.
Subsequent amendments and transition requirements.
The reasoning connecting the facts to the accounting conclusion.

This process separates historical background from the authoritative guidance supporting the final decision.

Common Mistakes to Avoid

Assuming That “Staff” Means Unofficial

Historical FSPs had a defined place in the former GAAP hierarchy. Their name did not make their requirements optional.

Treating Superseded as Synonymous With Incorrect

A document may be superseded because the Codification reorganized the accounting literature. Whether an individual requirement subsequently changed is a separate question.

Citing Only an Archived PDF

An archived FSP can support a discussion of historical accounting requirements. A current accounting conclusion generally needs the applicable ASC paragraphs and any relevant amendments.

Ignoring the Reporting Period

The requirements applicable to an older financial statement may differ from those applying today. Always establish the relevant reporting period and consider effective dates and transition provisions.

Conclusion

FASB Staff Positions played an important role in the historical U.S. GAAP framework by clarifying or amending accounting requirements for specific issues.

Although they are no longer independently authoritative under the current Codification framework, they remain useful for understanding older financial statements and tracing the development of accounting rules.

The practical approach is to identify the historical FSP, locate the related ASC guidance, and verify subsequent amendments. This allows researchers to preserve historical context while basing current accounting conclusions on the applicable authoritative requirements.

(FAQs)

What does FSP stand for in accounting?

FSP stands for FASB Staff Position, a formal accounting pronouncement used in the pre-Codification U.S. GAAP framework.

Does FASB still issue Staff Positions?

FASB communicates changes to the Codification through Accounting Standards Updates. FSPs belong to the historical accounting literature that preceded this framework.

When were FASB Staff Positions superseded?

Where can I find an old FASB Staff Position?

Start with FASB’s official pre-Codification standards archive. Historical accounting research platforms may also provide copies and background information.

Can I cite an FSP in a current accounting memo?

Yes, as historical background where relevant. Support a current accounting conclusion with the applicable ASC requirements and consider subsequent amendments, effective dates, and relevant SEC guidance.