Abstract The development and promulgation of accounting standards in the private sector has been a continuing challenge for the accounting profession. The varied rule making bodies, including the Committee on Accounting Procedures, the Accounting Principles Board, and now the Financial Accounting Standards Board (FASB), have all been simultaneously praised and criticized for their efforts. Currently, six statements of financial accounting concepts (SFAC) have been issued and appear to complete the FASB efforts on this project. This paper examines SFAS No. 14 disclosures in a segment of the banking industry to determine if this conceptually based standard is being used with significant preparer discretion as intended. The article compares the segment disclosure of individual firms to SFAS No. 14 and to the guidelines of the Conceptual Framework expressed in SFAC No. 2. Assessment is made as to whether the resulting disclosures, on an industry or group of firms basis, accomplish the objectives of SFAC No. 2.
Tyson et al. (1987) studied this question.