Financial Accounting Standard Codification

Question 1

What are the Goals of the codification?

Answer 1

1. ) simplify the structure and accessibility
2. ) provide all authoritative literature
3. ) reduce the time and effort required to research
4. ) reduce the risk of noncompliance
5. ) facilitate updating of accounting standards
6. ) assist the FASB with research and convergence efforts

Question 2

How are changes to authoritative GAAP accomplished?

Answer 2

Through FASB accounting standards updates (ASU). No longer will separate FASB statements or other documents be separately published. They are designated chronologically by year

Question 3

What is an Accounting Standards Update (ASU)?

Answer 3

Separate document posted on the FASB website that:

1. ) summarizes the key aspects of the update
2. ) details how the codification will change
3. ) explains the basis for the updates

ASUs are not authoritative. Once the content is incorporated into the codification the update becomes part of GAAP

Question 4

How does the codification show an ASU during its transition period?

Answer 4

As a “ pending text”

Question 5

What is the overall structure of the codification?

Answer 5

Areas - topics - subtopics - sections - subsections - paragraphs

Each area has at least one topic

Question 6

What is an “area” in the codification?

Answer 6

The highest level in the codification. There are 9

1. ) general principles (100)
2. ) presentation (200) does not address revenue or recognition
3. ) assets (300)
4. ) liabilities (400)
5. ) equity (500)
6. ) revenue (600)
7. ) expenses (700)
8. ) broad transactions (800)
9. ) industry specific (900)

Question 7

What is the primary research level in the code?

Answer 7

The section level. This is because the accounting guidance in the form of paragraphs lies here

Question 8

What is the FASB codification research system?

Answer 8

Online real-time database by which users access the codification through the Internet

Question 9

What is a “topic” in the codification?

Answer 9

There are approximately 90 topics spread across the nine areas

Question 10

What is a “subtopic” in the codification?

Answer 10

There is at least one subtopic within each topic. The “overall” subtopic appears within each topic and contains the “big picture” level guidance for a topic.

Question 11

What is a “section” in the codification?

Answer 11

Each subtopic has 16 sections all associated with a numeric identifier.