The extent of implementation guidance and scope
exceptions is central to characterizations of GAAP as being
‘‘rule-based.” As indicated by Schipper (2003), implementation
guidance makes a principle-based standard appear
rule-based. And scope exceptions, which are many times
included in standards to gain acceptance by FASB constituents,
are generally implemented by including additional
rules or implementation guidance in the standard. Such
rules-based features are understandable outcomes of the
political nature of the standard-setting process, and in
some cases are subsequently addressed in the process.
For example, SFAS No. 121 contained a scope exception
for impairments of segments. This standard was superseded
by SFAS No. 144 and amended by SFAS No. 142 with
respect to the impairment of intangible assets. Both of
these latter standards are arguably more principles-based.