SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Financial Accounting Standards Board 
Act''.

SEC. 2. DEFINITIONS.

    As used in this Act--
            (1) FASB.--The term ``FASB'' means the Financial Accounting 
        Standards Board.
            (2) Federal regulatory program.--The term ``Federal 
        regulatory program'' means a program enacted under the 
        authority of the Commerce Clause of the Constitution and 
        providing for the regulation of the interstate or foreign 
        commerce of the United States, or the use of the means or 
        instrumentalities of such commerce.
            (3) Person.--The term ``person'' includes corporations, 
        companies, associations, firms, partnerships, societies, and 
        joint stock companies, as well as individuals, but does not 
        include an agency or instrumentality of Federal, State, or 
        local government.

SEC. 3. STANDARDS AUTHORITATIVE.

    The standards of financial accounting and reporting promulgated by 
the FASB shall be authoritative for the purpose of determining 
compliance with generally accepted accounting principles by any person 
under any Federal regulatory program.

SEC. 4. DUTY OF FASB.

    The duty of the FASB shall be to establish and improve, after 
independent and impartial deliberation, standards of financial 
accounting and reporting for any person. To accomplish its duty, the 
FASB shall act to--
            (1) improve the usefulness to present and potential 
        investors, creditors, and other users, of financial reporting 
        made by firms in interstate commerce focusing on the primary 
        characteristics of relevance and reliability;
            (2) keep standards current to reflect changes in methods of 
        doing business and changes in the economic environment;
            (3) consider promptly any significant areas of deficiency 
        in financial reporting that might be improved through the 
        standard-setting process;
            (4) promote the international convergence of accounting 
        standards concurrent with improving the quality of financial 
        reporting; and
            (5) improve the common understanding of the nature and 
        purposes of information contained in financial reports.

SEC. 5. REQUIREMENTS FOR ESTABLISHMENT OF ACCOUNTING STANDARDS.

    (a) General Principles.--In promulgating and revising standards of 
financial accounting and reporting, the FASB shall follow the following 
principles:
            (1) Financial reporting should provide information that is 
        useful to present and potential investors and creditors and 
        other users in making rational investment, credit, and similar 
        decisions. The information should be comprehensible to those 
        who have a reasonable understanding of business and economic 
        activities and are willing to study the information with 
        reasonable diligence.
            (2) Financial reporting should provide information to help 
        present and potential investors and creditors and other users 
        in assessing the amounts, timing, and uncertainty of 
        prospective cash receipts from dividends or interest and the 
        proceeds from the sale, redemption, or maturity of the 
        securities or loans.
            (3) Financial reporting should provide information about 
        the economic resources of an enterprise, the claims to those 
        resources (obligations of the enterprise to transfer resources 
        to other entities and owners' equity), and the effects of 
        transactions, events, and circumstances that change resources 
        and claims to those resources.
    (b) Operating Objectives.--The FASB shall promote the following 
objectives in the conduct of its activities:
            (1) To be objective in its decision making and to ensure, 
        insofar as possible, the neutrality of information resulting 
        from its standards. To be neutral, information must report 
        economic activity as faithfully as possible without coloring 
        the image it communicates for the purpose of influencing 
        behavior in any particular direction.
            (2) To weigh carefully the views of its constituents in 
        developing concepts and standards. However, the ultimate 
        determinant of concepts and standards must be the FASB's 
        judgment, based on research, public input, and careful 
        deliberation about the usefulness of the resulting information.
            (3) To bring about needed changes in ways that minimize 
        disruption to the continuity of reporting practice, including 
        establishment of reasonable effective dates and transition 
        provisions when new standards are introduced. Change should be 
        evolutionary to the extent that it can be accommodated by the 
        need for relevance, reliability, comparability, and 
        consistency.
            (4) To review the effects of past decisions and interpret, 
        amend, or replace standards in a timely fashion when such 
        action is indicated.
    (c) Primary Standard Requiring Adherence to Principles.--
            (1) Promulgation required.--The FASB shall promulgate a 
        primary standard requiring the application of the principles 
        articulated in subsection (a) of this section to financial 
        accounting and reporting. Except as provided in paragraph (2), 
        such primary standard shall prohibit the application of any 
        other standard of financial accounting and reporting 
        promulgated by the FASB in a manner, or with a result, that 
        fails to comply with such principles.
            (2) Deviations explained and justified.--The primary 
        standard promulgated pursuant to this subsection may allow for 
        deviation from the application of such principles only if an 
        explanation and justification for the basis of the deviation is 
        specifically articulated and made public.
    (d) Establishment of Additional Standards.--The FASB shall develop 
additional standards of financial accounting and reporting to address 
issues relating to--
            (1) off-balance-sheet accounting practices and standards, 
        and accounting requirements for special-purpose entities, in a 
        manner that is based on principles for determining bona fide 
        economic control; and
            (2) requirements for marked-to-market accounting, including 
        consideration of the application of fair value to agreements 
        involving commitments on the part of an issuer.
    (e) Additional Projects.--
            (1) Fair value project.--Within one year after the date of 
        enactment of this Act, FASB shall complete work on the project 
        entitled ``Measuring All Financial Assets and Liabilities at 
        Fair Value''.
            (2) Revenue and liability recognition proposal.--Within 18 
        months after the date of enactment of this Act, FASB shall 
        complete work on the proposal entitled ``Proposal for new 
        agenda project: Issues relating to the recognition of revenues 
        and liabilities''.

SEC. 6. PRESERVATION OF AUTHORITY.

    Nothing in this Act shall be construed to limit--
            (1) the authority of the Securities and Exchange Commission 
        under the securities laws (as such term is defined in section 
        3(a)(47) of the Securities Exchange Act of 1934 (15 U.S.C. 
        78c(a)(47)); or
            (2) the authority of any other Federal agency under the 
        laws applicable to a Federal regulatory program administered by 
        such agency.

SEC. 7. REPORTS.

    (a) FASB Reports.--
            (1) Annual reports.--The FASB shall transmit annual reports 
        to the President, the Committee on Energy and Commerce of the 
        House of Representatives, and the Committee on Banking, 
        Housing, and Urban Affairs of the Senate.
            (2) Contents of reports.--Each report transmitted under 
        this subsection shall include the following:
                    (A) Assessment of resources.--An assessment by the 
                FASB of the resources available, and the sufficiency of 
                those resources, to carry out the purposes and 
                requirements of this Act.
                    (B) Evaluation of compliance.--An evaluation by the 
                FASB of the extent of the compliance of financial 
                statements with the standards of financial accounting 
                and reporting promulgated by the FASB and with the 
                requirements, objectives, and principles of sections 4 
                and 5.
                    (C) Progress on unresolved issues.--A statement by 
                the FASB of the progress made by the FASB in the 
                resolution of unresolved accounting standards issues.
                    (D) Progress on treatment of intangible assets.--A 
                statement of progress made by the FASB in modernizing 
                and improving the accounting treatment for intellectual 
                property and other intangible assets.
            (3) Report on primary principle resolution.--The first 
        report transmitted under this subsection shall indicate the 
        resolution by the FASB of the issues identified in section 
        5(c).
    (b) GAO Reports.--
            (1) Annual reports required.--The Comptroller General shall 
        transmit annual reports to the President, the Committee on 
        Energy and Commerce of the House of Representatives, and the 
        Committee on Banking, Housing, and Urban Affairs of the Senate 
        on the FASB.
            (2) Contents of reports.--Each report transmitted under 
        this subsection shall include the following:
                    (A) Progress on unresolved issues.--An evaluation 
                of the FASB's progress in resolving unresolved 
                accounting standards issues, including a description of 
                such issues, the plans and timetables concerning, and 
                resources available for, the resolution of such issues, 
                and the reasons for any delays in resolving such 
                issues.
                    (B) Assessment of fasb independence.--An assessment 
                of the extent to which the FASB has maintained its 
                independence and objectivity, including an assessment 
                of any impairment of such independence and objectivity 
                resulting from the methods by which the FASB obtains 
                the resources required for its operations.
                    (C) Evaluation of procedures.--An evaluation of the 
                procedures followed by the FASB in accounting standard 
                setting, including the due process accorded to 
                interested parties, the efficiency of FASB procedures 
                in resolving issues, and the extent of the compliance 
                by the FASB with its own procedural requirements.
    (c) Unresolved Accounting Standards Issues.--For the purposes of 
this section, the term ``unresolved accounting standards issue'' means 
the open agenda items of the FASB and the FASB's Emerging Issues Task 
Force, and any other issues that this Act has added to that agenda.
Output: Financial Accounting Standards Board Act - States that the duty of the Financial Accounting Standards Board (FASB) is to establish and improve standards of financial accounting and reporting.Cites general principles and operating objectives to be followed when establishing financial accounting and reporting standards.Instructs the FASB to develop additional standards relating to: (1) off-balance-sheet accounting practices and standards, and accounting requirements for special-purpose entities, in a manner that is based on principles for determining bona fide economic control; and (2) marked-to-market accounting, including consideration of fair value to agreements involving commitments on the part of an issuer.Instructs the FASB to complete work on: (1) the project entitled "Measuring All Financial Assets and Liabilities at Fair Value;" and (2) the proposal entitled "Proposal for new agenda project: Issues relating to the recognition of revenues and liabilities."