What is communicated through Statements of Position (SOP)?

Statements of Position (SOP) are issued to provide guidance on specific financial reporting topics until more definitive accounting standards or guidance can be established by authoritative bodies, such as the Financial Accounting Standards Board (FASB). These documents serve as interim guidance to help organizations navigate accounting issues that may arise under unique circumstances or sectors.

SOPs address various topics within the realm of accounting and financial reporting, offering practical guidance that reflects current practices. This allows entities to apply consistent and relevant accounting principles while waiting for more formal regulations or standards to be developed and published. By serving this purpose, SOPs fulfill an essential role in ensuring that accountants and financial professionals have access to reliable guidance during periods of uncertainty in accounting standards development.