The Financial Accounting Standards Board (FASB) voted on Wednesday not to advance research and potential updates to accounting standards related to the preparation of personal financial statements.

The vote came less than two years after an accounting professor at Brooklyn College of the City University of New York submitted an agenda request calling on FASB to revise the relevant rules, citing ambiguity and disagreement over the interpretation of the standards exposed in the 2022 civil fraud lawsuit filed by New York State Attorney General Letitia James against President Donald Trump. In that case, Trump faced a civil fraud trial.

Last year, the accounting standard-setter also sought feedback on the matter, formally known as "Topic 274," from stakeholders including investors and other preparers and users of financial statements. This was part of its broader outreach program aimed at helping the board decide which new projects to add to its agenda and address.

On Wednesday, a staff member told the board that current guidance on the preparation and presentation of personal financial statements requires assets to be measured at estimated current value and liabilities at estimated current amounts. According to a FASB agenda consultation document dated January 3, 2025, some stakeholders did suggest that FASB consider requiring assets in personal financial statements to be measured at fair value and address disclosure requirements. However, the staff member said they questioned the "pervasiveness" of these concerns and the need to address the topic, noting that most stakeholders viewed the issue as a lower priority.

FASB member Joyce T. Joseph, one of the board members who voted against taking on the topic, pointed out that solutions already exist in current guidance. "I do understand the view of stakeholders that fair value accounting might be more decision-useful, but given the potential uses of personal financial statements, the estimated current value approach is certainly more practical; it is less complex and more cost-effective," Joseph said during the meeting.

FASB Chair Richard Jones also voted against taking on the topic and noted that the guidance originated from the American Institute of Certified Public Accountants (AICPA). "We just codified it," Jones said during the meeting. He suggested that at some point in the future, FASB should consider whether to ask the AICPA to take it up. "That way they could address some of the issues," he said, "but that is for later."

Daniel Tinkelman, the Brooklyn College professor who requested that FASB address personal financial statement issues, expressed disappointment with the decision. He also questioned FASB's determination that the matter was not "pervasive," a key element the board must meet to take on a project.

"Clearly, lenders have long needed these (personal financial) statements," Tinkelman said in an interview after Wednesday's vote. "I am disappointed they did not seize the opportunity to clean it up."

In a 2024 letter outlining the need for changes, Tinkelman noted that Trump himself had highlighted problems with current GAAP guidance.

During the trial, Trump testified that due to the flexibility of GAAP, he believed his personal financial statements were "worthless." In his letter, Tinkelman cited expert witnesses who said GAAP allows for differences of orders of magnitude in values. "I respectfully suggest that FASB consider whether it needs to amend and clarify the accounting in this area," the letter said.

On Wednesday, Tinkelman noted that although his agenda request focused on the case, no one mentioned Trump during the FASB meeting. "I think when the President of the United States says his personal financial statements are 'worthless,' it is necessary to investigate the situation," Tinkelman said in an email. "Moreover, when expert witnesses cannot agree on the rules in a case involving the President, clarifying the rules becomes imperative."