The GAAP hierarchy ranks the relative authority of accounting principles issued from multiple standard-setters. The exposure draft carries forward the GAAP hierarchy as set forth in SAS 69, subject to certain modifications that are not expected to result in a change in current practice.

Recently, FASB has implemented procedures to narrow the types of accounting principles that it issues. FASB's codification and retrieval project will integrate existing U.S. GAAP into a single source, thereby creating a single codification of GAAP.

In commenting on the exposure draft, FASB Chairman Robert Herz, stated, "The proposed statement is an important first step towards improving the GAAP hierarchy. Several other FASB projects, such as the codification and retrieval project, aim to simplify standards and the standard-setting process. This proposed statement facilitates those future improvements."

The comment period for the exposure draft ends June 27, 2005. The document is available on the FASB's website at www.fasb.org.