Short answer
- The Accounting Principles Board, usually shortened to APB, was the former authoritative accounting standard setting body of the American Institute of Certified Public Accountants (AICPA). It was created in 1959 and issued pronouncements on accounting principles until 1973, when it was replaced by the Financial Accounting Standards Board (FASB). Its main pronouncements were called APB Opinions. The APB issued 31 opinions and four statements during its lifetime. Some of the guidance in those opinions was later amended or superseded by the FASB, while other guidance was carried into later US generally accepted accounting principles (GAAP). The APB no longer sets accounting standards, so any modern reference to an APB Opinion is a reference to history, or to older guidance that must be checked against current GAAP before it is relied on.
What the Accounting Principles Board was
If you meet the term Accounting Principles Board in a textbook, an old financial statement footnote, or a history of accounting, it almost always means the same thing: the AICPA body that was responsible for US accounting principles in the years before the FASB existed. It was not a government agency, and it was not the same body as the Securities and Exchange Commission (SEC). The SEC oversees financial reporting by public companies in the United States, but the work of writing the accounting principles in this period sat with the profession itself, through the AICPA and its board.
That distinction explains what the APB could do and why it was replaced. The APB had authority within the profession. Its opinions were treated as authoritative guidance for financial reporting under US GAAP at the time. At the same time, the board was part of the AICPA, its members served part time alongside other jobs, and its output was slow relative to the pace of change in business. Those three facts run through almost every account of its history.
A useful one sentence definition is this: the Accounting Principles Board was the AICPA board, active from 1959 to 1973, that issued authoritative pronouncements on US accounting principles, principally in the form of APB Opinions, before the FASB took over US standard setting.
The definition in plain language
Accounting principles are the shared rules and conventions that companies use when they prepare financial statements, so that readers can compare one company with another and follow the same story from year to year. A standard setter is the body that writes, debates, and publishes those rules. The APB was the US standard setter of its era. When accountants of that period said that a treatment was in accordance with GAAP, they often meant that it followed an APB Opinion, an earlier Accounting Research Bulletin, or another pronouncement with authoritative support.
The APB did not write tax law, and it did not audit companies. Its job was narrower: to decide how transactions and events should be recognized, measured, presented, and disclosed in financial statements. Recognition means deciding whether an item belongs in the statements at all. Measurement means deciding at what amount. Presentation means deciding where it appears. Disclosure means deciding what extra explanation the notes must give.
Why the term still appears today
Students and researchers still search for the APB definition for three practical reasons. First, older textbooks cite opinion numbers without always explaining who issued them. Second, the FASB Accounting Standards Codification reorganized earlier pronouncements by topic rather than by issuing body, so tracing a rule back to its origin often leads to an APB Opinion. Third, the APB story is the standard example of why standard setting moved from a part time committee inside a professional body to a full time, independent board.
A short history of US standard setting before the APB
The Committee on Accounting Procedure, 1939 to 1959
In 1939, the AICPA established the Committee on Accounting Procedure (CAP). The CAP issued 51 Accounting Research Bulletins (ARBs) between 1939 and 1959. Those bulletins dealt with specific accounting problems as they arose, one issue at a time. That case by case approach solved immediate problems, but it did not produce a unified framework tying the individual answers together. Over time, the profession concluded that it needed a body with a broader mandate: not only to answer emerging questions, but also to work toward a coherent set of principles.
The creation of the APB in 1959
The AICPA created the Accounting Principles Board in 1959 to take over from the CAP. The new board carried a dual mission that its predecessor had not fully carried. It was expected to develop a conceptual framework to guide the establishment of accounting principles, and at the same time to issue pronouncements resolving emerging issues in practice. In other words, it was supposed to think about the system as a whole while still answering the next practical question. That tension between the long term framework and the short term answer shaped much of the APB’s record.
The board’s numbered opinions were being issued by the early 1960s. For example, APB Opinion No. 2, on accounting for the investment credit, is dated December 1962. From that point on, the opinion numbers run through the rest of the 1960s and into the early 1970s, ending with the opinions of 1973, the board’s final year.
Timeline
| Year | Event |
|---|---|
| 1939 | The AICPA establishes the Committee on Accounting Procedure (CAP). |
| 1939 to 1959 | The CAP issues 51 Accounting Research Bulletins. |
| 1959 | The AICPA creates the Accounting Principles Board (APB) to succeed the CAP. |
| December 1962 | APB Opinion No. 2, on accounting for the investment credit, is issued. |
| 1966 to 1973 | The APB issues its best known opinions on reporting results, business combinations, intangible assets, accounting changes, interest, disclosure of accounting policies, stock issued to employees, interim reporting, and related topics. |
| 1971 | The AICPA appoints a study group chaired by Francis Wheat to examine the organization and operation of the APB. |
| March 1972 | The Wheat Committee publishes its report, the Report of the Study on Establishment of Accounting Principles. |
| 1973 | The FASB replaces the APB and begins operations, with July 1, 1973 given as the replacement date. The SEC issues Accounting Series Release No. 150, stating that FASB pronouncements will be considered as having substantial authoritative support. |
| July 1, 2009 | The FASB launches the Accounting Standards Codification as the single source of authoritative nongovernmental US GAAP, reorganizing earlier pronouncements, including APB Opinions, by topic. |
How the APB worked
Membership and structure
The APB was a board inside the AICPA, not a separate independent organization. Its membership is generally reported as varying between 18 and 21 members, drawn from public accounting firms, industry, and academia. That mix was deliberate. A board made up only of auditors might have written rules that were hard for companies to apply, while a board made up only of company accountants might have written rules that were hard for auditors to accept. The mixed membership was meant to balance those viewpoints.
The trade off was time. APB members served part time, alongside their full time jobs in firms, companies, or universities. That structure limited how quickly the board could research an issue, debate it, expose a draft for comment, and reach a final opinion. It also raised a question about independence that would later become central to the case for replacing the board. Members who remained employed by firms and companies could be seen, fairly or not, as close to the interests those firms and companies represented.
Secondary sources also report that issuing an opinion required a two thirds vote of the members. That voting rule helps explain another feature of the APB record: the number of qualified approvals, or assents with reservations, appended to opinion documents by members who agreed with the outcome in general but not with every part of it. That high bar made unanimous, unqualified agreement hard to achieve.
Opinions, statements, and other pronouncements
The APB’s principal output was its opinions. It issued 31 APB Opinions in total, together with four APB Statements. Opinions were the authoritative pronouncements: the guidance that accountants were expected to follow in preparing financial statements in conformity with GAAP, unless an opinion was later superseded. Statements were generally broader and less authoritative in character. The distinction matters, because not everything with the APB name on it carried the same weight.
An APB Opinion number is therefore a citation, not a topic in itself. When a textbook cites APB Opinion No. 22, it is pointing to one specific pronouncement, on disclosure of accounting policies, issued in April 1972. When it cites APB Opinion No. 16, it is pointing to a different pronouncement, on business combinations, issued in August 1970. Reading the number as a citation is the key to using the rest of this article.
What APB Opinions covered
APB Opinions covered a wide range of financial reporting topics. The table below covers the opinions most often cited, with subjects and dates as recorded in standard references.
| Opinion | Subject | Date issued |
|---|---|---|
| No. 2 | Accounting for the investment credit | December 1962 |
| No. 4 | Accounting for the investment credit | March 1964 |
| No. 6 | Status of Accounting Research Bulletins | October 1965 |
| No. 9 | Reporting the results of operations | November 1966 |
| No. 10 | Omnibus Opinion, 1966, including consolidated financial statements and tax allocation | December 1966 |
| No. 12 | Omnibus Opinion, 1967, including allowances, depreciation, deferred compensation, capital changes, and debt | December 1967 |
| No. 14 | Accounting for convertible debt and debt issued with stock purchase warrants | March 1969 |
| No. 16 | Business combinations | August 1970 |
| No. 17 | Intangible assets | August 1970 |
| No. 18 | The equity method of accounting for investments in common stock | March 1971 |
| No. 20 | Accounting changes | July 1971 |
| No. 21 | Interest on receivables and payables | August 1971 |
| No. 22 | Disclosure of accounting policies | April 1972 |
| No. 23 | Accounting for income taxes, special areas | April 1972 |
| No. 25 | Accounting for stock issued to employees | October 1972 |
| No. 26 | Early extinguishment of debt | October 1972 |
| No. 28 | Interim financial reporting | May 1973 |
| No. 29 | Accounting for nonmonetary transactions | 1973 |
| No. 30 | Reporting the results of operations, including discontinued operations and extraordinary items | 1973 |
Opinions No. 9 and No. 30: reporting the results of operations
Opinion No. 9, issued in November 1966, dealt with how the results of operations should be reported, including net income, extraordinary items, and the computation of earnings per share. Opinion No. 30, issued in the board’s final year, returned to the same territory with a narrower approach to discontinued operations and to extraordinary items. Under Opinion No. 30, an event or transaction could be classified as an extraordinary item only if it met two criteria at once: it had to be unusual in nature, and it had to be infrequent in occurrence. Both conditions had to be met. An item that was unusual but expected to recur, or infrequent but part of ordinary business, did not qualify. Judgment was required, and the environment in which the company operated had to be taken into account, so the same type of event could be extraordinary for one company and not for another. That two part test is still the classic textbook illustration of how the APB tried to bring discipline to a presentation question that had previously produced inconsistent practice.
Opinions No. 16 and No. 17: business combinations and intangible assets
Opinion No. 16, issued in August 1970, provided guidance on accounting for business combinations. Opinion No. 17, issued in the same month, provided guidance on intangible assets, including goodwill. These two opinions are often taught together, because a business combination frequently creates goodwill, and the accounting for the combination and the accounting for the resulting intangible asset have to fit together. Both were influential in their time, and both were later revisited by the FASB as thinking on combinations and intangibles developed.
Opinions No. 22, No. 25, and No. 28: disclosure, employee stock, and interim reports
Opinion No. 22, issued in April 1972, required disclosure of accounting policies in the notes to the financial statements. The idea was simple but powerful: a reader cannot interpret a set of financial statements without knowing which accounting policies the company chose where GAAP permitted a choice. That principle, that the notes must explain the policies behind the numbers, has survived in modern disclosure practice even though the specific opinion has been superseded and reorganized into the Codification.
Opinion No. 25, issued in October 1972, established guidance on accounting for stock issued to employees as compensation. At the time, this was a contested area, and the opinion’s approach later became the focus of intense debate in the 1990s, when the FASB revisited accounting for stock based compensation.
Opinion No. 28, issued in May 1973, clarified accounting principles for interim financial reporting, that is, for quarterly and other reports issued during a financial year rather than at its end. Interim reporting raises its own questions, such as how annual costs should be allocated across quarters, and interim reporting guidance has remained an important part of US GAAP ever since.
What happened to APB Opinions after 1973
A common misunderstanding is that the APB’s work simply vanished when the FASB replaced it. It did not. The transition preserved continuity: opinions not yet superseded remained part of GAAP, and the FASB gradually amended or replaced them where it saw a need. Over the following decades, many APB Opinions were superseded in whole or in part by FASB Statements and later standards, while elements of others were carried forward, sometimes in modified form, into later guidance.
The clearest statement of the eventual position comes from the FASB itself. When the FASB launched the Accounting Standards Codification on July 1, 2009, it described the Codification as the single source of authoritative nongovernmental US GAAP, effective for interim and annual periods ending after September 15, 2009. All existing accounting standards documents were superseded as described in FASB Statement No. 168, and all other accounting literature not included in the Codification became nonauthoritative. The Codification reorganized thousands of pronouncements into roughly 90 accounting topics, and its list of codified pre-Codification sources expressly included APB Opinions alongside FASB Statements, Accounting Research Bulletins, and AICPA pronouncements. In practical terms, do not cite an APB Opinion as current authority on its own: find where its surviving guidance now sits in the Codification, or confirm that it has been superseded.
One dated figure illustrates why care is needed with older summaries. A 2003 reference work listed 19 APB opinions as still standing as part of GAAP at that time. That figure describes the position in 2003, before the Codification reorganized GAAP in 2009 and before later FASB standards superseded further guidance. It should not be quoted as the position today. Anyone who needs the current status of a specific opinion should check the Codification and any later FASB standards that address the same topic, rather than relying on a count from an earlier decade.
Why the APB was replaced
By the early 1970s, confidence in the APB’s structure had weakened. The criticisms most often recorded fall into four groups, and each one points to a different feature of the FASB design that followed.
First, independence. Because the APB sat inside the AICPA, it could be seen as open to influence from its parent organization and from the firms and companies its members worked for. A standard setter perceived to serve the profession, or large preparers, rather than the wider public interest will struggle to command trust, even when its individual decisions are well reasoned. The remedy adopted in 1973 was structural: a new board separate from the AICPA and from other professional bodies, overseen by an independent foundation.
Second, part time membership. A part time board can only move as fast as its members’ spare time allows. The APB’s output over 14 years, 31 opinions and four statements, was modest for a body with a mandate as broad as US GAAP. Slow output meant that some issues went unaddressed, and that practice diverged in the meantime.
Third, qualified approvals and internal disagreement. The frequency of qualified approvals appended to APB opinions suggested that the board often reached agreement only with reservations. That pattern weakened the authority of the pronouncements themselves: a reader who saw several members dissenting in part might reasonably wonder how settled the guidance really was.
Fourth, timeliness and public confidence. Taken together, slow output and questions about independence fed a wider concern about public confidence. The SEC, which relies on private sector standard setting for public companies but retains ultimate authority over their financial reporting, had an interest in a system that could act promptly and credibly. The contemporary SEC assessment, quoted in histories of the board, described the APB’s overall record as reasonably good, while concluding that a smaller full time body directly in control of its research held promise of more success. That measured verdict captures the transition well. The APB was not replaced because everything it did was wrong. It was replaced because its structure was judged unlikely to meet the demands placed on it.
The Wheat Committee and the creation of the FASB
The formal route from the APB to the FASB ran through a study group appointed by the AICPA. In 1971, Marshall Armstrong, then president of the AICPA, appointed a group of seven men, collectively called the Wheat Committee after its chair, Francis Wheat, to examine the organization and operation of the APB and to determine what adjustments were needed to facilitate more accurate and timely results and to avoid governmental rule making. The committee’s findings, the Report of the Study on Establishment of Accounting Principles, were published in March 1972.
The Wheat Report proposed a new structure with three parts. First, a Financial Accounting Foundation (FAF), separate from other professional firms, to oversee the system, appoint board members, and raise funds. Second, a Financial Accounting Standards Board (FASB) made up of full time members, to set the standards. Third, a Financial Accounting Standards Advisory Council (FASAC) to advise the board and to provide a channel for stakeholder input. The FASB was conceived as a full time body whose deliberations would encourage broad participation, consider stakeholder views objectively, and avoid direction by political or private interests.
The AICPA adopted the recommendations, the APB was dissolved, and the FASB began operations in 1973. The FASB replaced the APB on July 1, 1973. In the same year, the SEC issued Accounting Series Release No. 150, stating that FASB pronouncements would be considered by the SEC as having substantial authoritative support. That SEC recognition was essential, because it confirmed that the new private sector board’s standards would be accepted as authoritative for public company reporting.
The FASB’s own description today reflects that history: established in 1973, based in Norwalk, Connecticut, independent and private sector, recognized by the SEC as the designated standard setter for public companies, and overseen by the Financial Accounting Foundation.
APB versus FASB at a glance
| Feature | Accounting Principles Board (APB) | Financial Accounting Standards Board (FASB) |
|---|---|---|
| Parent or oversight body | American Institute of Certified Public Accountants (AICPA) | Financial Accounting Foundation (FAF) |
| Active period | 1959 to 1973 | 1973 to the present |
| Membership pattern | Part time members from firms, industry, and academia, generally reported as 18 to 21 members | Full time board members, originally seven members |
| Main pronouncements | APB Opinions (31) and APB Statements (4) | Statements of Financial Accounting Standards, later reorganized into the Accounting Standards Codification |
| Independence | Inside the AICPA, with perceived scope for influence from the parent body and members’ employers | Separate, independent, private sector body overseen by the FAF |
| Output pace | Relatively slow, reflecting part time membership | Full time staff and board, able to sustain a larger program of standards |
| SEC recognition in its era | Opinions treated as authoritative GAAP of the time | Designated by the SEC as the standard setter for public companies, confirmed in 1973 by Accounting Series Release No. 150 |
FAQ
What is the Accounting Principles Board definition in one sentence?
The Accounting Principles Board was the AICPA body, active from 1959 to 1973, that issued authoritative pronouncements on US accounting principles, principally APB Opinions, before being replaced by the FASB.
Who created the Accounting Principles Board?
The American Institute of Certified Public Accountants (AICPA) created the APB in 1959, as the successor to its earlier Committee on Accounting Procedure.
When did the Accounting Principles Board operate?
The APB operated from 1959 to 1973. It was replaced by the Financial Accounting Standards Board in 1973, with July 1, 1973 given as the replacement date.
What did the APB issue?
The APB issued 31 APB Opinions and four APB Statements. Opinions were its authoritative pronouncements, covering reporting results, business combinations, intangible assets, the equity method, accounting changes, interest, disclosure of accounting policies, stock issued to employees, interim reporting, and nonmonetary transactions.
Why was the APB replaced by the FASB?
The APB was replaced mainly because of concerns about independence, part time membership, slow output, and frequent qualified approvals. The Wheat Committee’s 1972 report recommended an independent foundation overseeing a full time board, with an advisory council for stakeholder input. The FASB was created on that model in 1973.
Is the APB the same as the FASB?
No. The APB was the predecessor body inside the AICPA, active from 1959 to 1973. The FASB is the successor body, established in 1973, overseen by the Financial Accounting Foundation, and recognized by the SEC as the designated standard setter for public companies.
Do APB Opinions still matter?
They matter historically and as the origin of some later guidance, but they should not be cited as current authority without checking the FASB Accounting Standards Codification. Many opinions have been amended or superseded, and the Codification reorganized surviving guidance by topic in 2009.
What was APB Opinion No. 22 about?
APB Opinion No. 22, issued in April 1972, was about disclosure of accounting policies. It required disclosure of significant accounting policies in the notes to the financial statements, so that readers could understand the basis on which the statements were prepared.
What was APB Opinion No. 30 about?
APB Opinion No. 30, issued in 1973, was about reporting the results of operations, including discontinued operations and extraordinary items. It defined an extraordinary item as an event or transaction that was both unusual in nature and infrequent in occurrence. Both criteria had to be met. This is a historical definition, and current presentation guidance must be checked in the Codification.
What came before the APB?
The Committee on Accounting Procedure (CAP) came before the APB. The CAP was established by the AICPA in 1939 and issued 51 Accounting Research Bulletins between 1939 and 1959. The APB succeeded the CAP in 1959.
What is the difference between the APB and the SEC?
The APB was an AICPA standard setting board. The SEC is a federal agency that oversees financial reporting by public companies. The SEC recognized private sector standard setting, including the FASB from 1973, but it did not operate the APB.
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Sources & references
- Financial Accounting Standards Board. FASB news release, July 1, 2009, "The Codification is now officially the single source of authoritative nongovernmental US GAAP." Read via text fetch on October 24, 2026. This source supports the Codification launch date, its status as the single source of authoritative nongovernmental US GAAP, its effectiveness for periods ending after September 15, 2009, the reorganization into roughly 90 topics, and the inclusion of APB Opinions among the codified pre-Codification sources.
- Financial Accounting Standards Board. FASB news release, August 3, 2018, "About the Financial Accounting Standards Board" section. Read via text fetch on October 24, 2026. This source supports the statements that the FASB was established in 1973, is based in Norwalk, Connecticut, is the independent, private sector, not for profit organization that establishes GAAP standards, is recognized by the SEC as the designated standard setter for public companies, and is supported and overseen by the Financial Accounting Foundation.
- Accounting Principles Board, reference summary with opinion table, including creation in 1959, replacement in 1973, 31 opinions and four statements, and opinion subjects and dates. Read via text fetch on October 24, 2026.
- Financial Accounting Standards Board, reference summary, including replacement of the APB on July 1, 1973, SEC designation, and operation under the Financial Accounting Foundation. Read via search result text on October 24, 2026.
- Wheat Committee history as summarized in FASB history materials located via search on October 24, 2026, including appointment in 1971, the March 1972 report, and the recommended FAF, FASB, and FASAC structure.
