Final answer:
The FASB's Conceptual Framework is a non-authoritative guide that lays down the fundamentals and objectives.
Step-by-step explanation:
The FASB has developed a Conceptual Framework that is not authoritative GAAP but provides an underlying structure for the development of accounting standards. This framework outlines the objectives and fundamentals that guide the creation of accounting standards and ensures that they are based on consistent and logical principles.
It includes elements such as the objective of financial reporting, qualitative characteristics of useful financial information, and elements of financial statements, among others. While the Conceptual Framework itself is not GAAP, it serves an essential role in promoting harmonization and consistency within the accounting field.
It is intended to be a guide for the FASB as it works on establishing new accounting standards and for practitioners when a standard does not exactly fit a particular accounting issue. Essentially, it is a tool for understanding and interpreting GAAP.