Flashcards in Financial Accounting Standard Codification Deck (11):
What are the Goals of the codification?
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
How are changes to authoritative GAAP accomplished?
Through FASB accounting standards updates (ASU). No longer will separate FASB statements or other documents be separately published. They are designated chronologically by year
What is an Accounting Standards Update (ASU)?
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
How does the codification show an ASU during its transition period?
As a " pending text"
What is the overall structure of the codification?
Areas - topics - subtopics - sections - subsections - paragraphs
Each area has at least one topic
What is an "area" in the codification?
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)
What is the primary research level in the code?
The section level. This is because the accounting guidance in the form of paragraphs lies here
What is the FASB codification research system?
Online real-time database by which users access the codification through the Internet
What is a "topic" in the codification?
There are approximately 90 topics spread across the nine areas
What is a "subtopic" in the codification?
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.