What is the first step in the FASB statement process?

The first step in the FASB statement process involves identifying topics that need to be addressed and placing them on the board's agenda. This step is crucial as it lays the groundwork for the entire process of developing accounting standards. By determining which topics are relevant and require attention, the FASB ensures that the most important and pressing issues in financial reporting are prioritized for discussion and analysis. This prioritization is essential because it directs the board's resources and efforts to areas where there may be significant stakeholder interest or where existing standards may require improvement or updating.

Following this step, further actions such as conducting research, issuing discussion memorandums, and holding public hearings typically occur as part of the broader process to develop and refine accounting standards, but these occur after topics have been officially recognized and placed on the agenda. This initial identification is foundational to the orderly development of accounting principles and fosters a systematic approach to addressing emerging or existing financial reporting issues.