Exposure Draft Definition
A Little More on What is an Exposure Draft
An exposure draft is not a final document. It is an arranged document meant for people to discuss, deliberate, make comment about. It is an intended review of an accounting standard before it is passed as a law.
The exposure draft also serves as the opinion of the FASB on an accounting issue.
Even More Explanation of an Exposure Draft
The exposure draft is used to reduce consequences that might result from an accounting review or pronouncement if comments and opinions from the public were not sought.
FASB, however, considers comments from professionals in the accounting and finance industries or corporate organizations and industries who might be impacted by the review or who have sufficient knowledge about the issue to provide relevant feedback.
This gives the FASB the opportunity to revise the exposure draft before it is standardized or made a mandatory Financial Accounting Standard (FAS).