Accounting Standards Update (ASU)

An Accounting Standards Update (ASU) is a formal communication from the Financial Accounting Standards Board (FASB) that clarifies, modifies, or introduces new rules for financial reporting. It ensures consistency and transparency in how organizations record and present financial information. ASUs help accountants and companies stay aligned with best practices and evolving business environments by providing clear guidance. Think of it as an update to the “rules of the road” for financial statements, ensuring users can compare and understand companies' financial health effectively.