Financial Accounting Standards Board (FASB)

the Financial Accounting Standards Board (FASB) as the body that has primary responsibility for determining U.S. GAAP. You can learn more about this organization at http://www.fasb.org. On the menu to the left, click on “Facts about FASB.”

a. How long has FASB been in existence?

b. From which organization does FASB get its power?

c. Why do you think it is important that FASB be independent?

d. What role does the Financial Accounting Foundation play?

e. Name two current members of FASB.

f. What is the EITF?

2. Four fundamental accounting terms “What Should Decision-makers Know So That Good Decisions Can Be Made about an Organization?”: assets, liabilities, revenues, and expenses. We will explore these items further by examining the financial statements of Starbucks. You can access their financial statements by visiting http://www.starbucks.com. You will need to click “about us” at the top and then “investor relations” on the left. Click on “annual reports” in the menu on the left. Select the 2007 Annual Report—Financials. On the left side menu, select Item 8 (financial statements).

a. The first page contains a statement showing the revenues and expenses for the year. What is this statement called?

b. What was Starbucks’ total net revenue for the year?

c. “What Should Decision-makers Know So That Good Decisions Can Be Made about an Organization?”, can you say that this revenue number reported is the exact revenue earned by Starbucks in 2007? If not, what can you say about this revenue number?

d. List two expenses reported by Starbucks.

e. The statement on the next page reports Starbucks’ assets and liabilities. What is this statement called?

f. Name two assets and two liabilities reported by Starbucks.