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Using the FASB Accounting Standards
Codification™
July 1 was a landmark day for the accounting profession as the Financial
Accounting Standards Board (FASB)
Accounting Standards
Codification™ (ASC) became the
authoritative source of nongovernmental accounting literature (in addition
to Securities and Exchange Commission pronouncements). The FASB ASC
completely changed the presentation of GAAP, profoundly affecting how
standards are researched and referenced now.
The codification is effective for interim and annual periods ending after
September. 15, 2009, which means preparers had to begin using it for periods
that began on or about July 1, 2009. For private companies without interim
filings and that have calendar year-ends, their December 31, 2009, financial
statements would be the first set of financial statements that are required
to refer to FASB ASC.
“It should make research easier for financial statement preparers, auditors
and academicians, but there will be a learning curve as they become familiar
with the FASB ASC and how it is organized,” said MACPA President and CEO
Peggy Dzierzawski. “A wide range of resources are available to help CPAs
understand and use the FASB ASC.”
Here are some ways to get acquainted with the FASB ASC:
- Access the codification. With the July 1 launch, the online
FASB ASC became a
fee-based service (a no-frills version without the research tools and
other functionalities remains free). Additional information on it, such
as press releases, frequently asked questions, links to resources and an
archived June 22 Webcast, is available from the
FASB’s home page.
- AICPA dedicated website for background, information and resources.
An
AICPA web page devoted to the codification also contains a wealth of
resources, including free archived Webcasts from both the AICPA and the
FASB and access to articles and publications. From there, link to the
AICPA’s
FASB ASC Overview and Recent Developments Web page, which also is
available for download in
PDF format. It explains the scope and structure of the FASB ASC and
the FASB ASC Research System. The PDF document will enable you to read
offline, easily share the information and use it as a handout for staff,
clients and colleagues.
- Glean insight through a video and articles. An informational
one-minute
video featuring Arleen Thomas, AICPA senior vice president - Member
Competency and Development, highlights how the codification is different
from GAAP as members have always known it. In addition, a
Journal of Accountancy article offers some background on the
project and briefly explains how the new computer-based system differs
from the prior, paper-based GAAP hierarchy. Additional articles and
resources are available on the magazine’s
GAAP Codification resources page.
- Share your knowledge with coworkers using an AICPA-developed
PowerPoint presentation. This
PowerPoint presentation with notes is designed to help CPAs educate
others in their organizations on the FASB ASC. It will help them
understand the purpose, meaning and structure of the FASB ASC; how to
use it; and available resources.
Gone are the FASB Statement Nos., Financial Interpretation Nos., Emerging
Issues Task Force pronouncements, AICPA Accounting Statements of Position,
Accounting Principles Bulletins, and all the other familiar names of
pronouncements. GAAP now looks more like the Internal Revenue Code in terms
of how it will be referenced as authoritative literature.
In addition, for nongovernmental entities, whatever is not in the FASB
Accounting Standards Codification is not authoritative. There are now only
two levels of GAAP – authoritative (in the codification) and
non-authoritative (not in the codification).
The FASB ASC is here. The time to use it is now.
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July/August 20099
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