FASB Codification On July 1, 2009, Financial Accounting Stan ✓ Solved

FASB Codification On July 1, 2009, Financial Accounting Stan

FASB Codification On July 1, 2009, Financial Accounting Standards Board (FASB) released its Accounting Standards Codification. The Codification is the single source of authoritative nongovernmental U.S. GAAP, effective for periods ending after September 15, 2009. The purpose is to consolidate authoritative US GAAP, represent US GAAP as of July 1, 2009, and provide an up-to-date research system. Task: Review the Codification, learn how it is structured, develop research skills using the Codification. Access the Codification, view the FASB Codification Part I and Part II videos (or YouTube versions), and complete lessons 1–6 in the Codification Learning Guide. Summarize what you learned in a 2–3 page (double-spaced) paper and cite your sources.

Paper For Above Instructions

Introduction

The Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC), launched July 1, 2009, centralized nongovernmental U.S. generally accepted accounting principles (US GAAP) into a single authoritative online research system (FASB, 2009). The Codification superseded the prior hierarchical arrangement of GAAP and clarified that literature not included in the Codification is nonauthoritative (FASB ASC Topic 105, 2009). This paper summarizes the structure of the Codification, describes research skills developed by completing the FASB videos and lessons 1–6 in the Learning Guide, and highlights practical approaches for effective GAAP research.

Background and Purpose of the Codification

The Codification was designed to consolidate all authoritative nongovernmental US GAAP into one place to improve accessibility and consistency (FASB, 2009). The key purposes are: (1) to place authoritative US GAAP in one integrated research system, (2) to represent authoritative GAAP as of July 1, 2009, and (3) to maintain an up-to-date online codification that evolves with new standards (FASB, 2009). Topic 105 explains the Codification’s authority: it is the single source for nongovernmental GAAP and supersedes the former level (a)-(d) hierarchy (FASB ASC Topic 105, 2009).

Codification Structure

The ASC organizes content by a numeric system: Topic.Subtopic.Section.Paragraph (e.g., ASC 606-10-25-1). Top-level classification begins with Topics (broad accounting areas), followed by Subtopics, Sections (presentation, recognition, measurement, disclosure), and then specific paragraphs (FASB Learning Guide, 2009). This hierarchical but modular layout supports precise cross-referencing and reduces duplication. Key structural features include:

  • Topics: Broad subjects such as Revenue (ASC 606) or Leases (ASC 842).
  • Subtopics: Narrower scopes within topics, e.g., general guidance vs. industry-specific guidance.
  • Sections: Standardized section headings (Overview, Recognition, Measurement, Disclosure) for consistent navigation.
  • Paragraph numbering: Stable, machine-readable references used in research and citations.

Research Tools and Navigation

FASB’s interface includes keyword search, browse-by-topic, links to related literature, and citation copy utilities. The Part I and Part II videos demonstrate search strategies—combining keyword logic, filters, and direct topic navigation improves efficiency (FASB Video, 2009). The Learning Guide lessons expand on practical tasks: locating a Topic, interpreting Section headings, tracing references to implementation guidance, and verifying the authoritative status of external materials (FASB Learning Guide, 2009).

Skills Gained from Lessons 1–6

Lessons 1–6 emphasize foundational skills for authoritative GAAP research. Key competencies developed include:

  • Understanding authority: Recognizing ASC as the single source for nongovernmental GAAP and differentiating between authoritative guidance and nonauthoritative literature (FASB ASC Topic 105, 2009).
  • Efficient navigation: Using browse and search functions to retrieve Topic-level guidance and drilling down to relevant Sections and paragraphs (FASB Learning Guide, 2009).
  • Using citations properly: Copying ASC citations for audit workpapers and memos and validating the effective dates of guidance (Kieso et al., 2019).
  • Cross-referencing and research trails: Following references to implementation guidance, staff positions, and SEC materials while recognizing when such materials are nonauthoritative (Deloitte, 2010).
  • Applying filters and advanced search: Narrowing results by document type, date, and authoritative status to expedite research (PwC, 2011).

Application: Conducting a Sample Research Task

Applying the lessons, a practical research workflow is: (1) define the accounting question, (2) identify candidate Topics using browse or keyword search, (3) read the Topic Overview and relevant Sections, (4) examine related literature (implementation guidance, staff Q&As) for interpretive issues, and (5) document the authoritative citation and reasoning. For example, researching revenue recognition issues leads directly to ASC 606 and its subtopics; the researcher should read ASC 606’s Overview, Recognition, and Disclosure sections and review illustrative examples and transition guidance (FASB, 2009; Kieso et al., 2019).

Benefits and Limitations

The Codification simplifies locating authoritative guidance and standardizes references, which reduces research time and improves consistency across practitioners (Journal of Accountancy, 2009). However, limitations exist: some legacy materials require interpretation to map to Codification Topics; nonauthoritative guidance remains useful for context but must be labeled appropriately (AICPA, 2009). Additionally, effective use requires familiarity with the taxonomy and the discipline to verify the effective dates of guidance (EY, 2012).

Conclusion and Recommendations

The FASB Codification is an essential tool for contemporary financial reporting research. Completing the Part I and II videos and lessons 1–6 develops the core skills for authoritative GAAP research: recognizing authoritative sources, navigating the ASC structure, performing focused searches, and documenting conclusions with precise ASC citations. To maintain research efficiency, I recommend regular practice using realistic research scenarios, keeping up with Codification updates, and consulting firm interpretive guides (Deloitte, PwC, EY) for complex or industry-specific issues (Deloitte, 2010; PwC, 2011; EY, 2012).

References

  • FASB. (2009). Accounting Standards Codification. Financial Accounting Standards Board. https://asc.fasb.org/
  • FASB ASC Topic 105. (2009). Generally Accepted Accounting Principles. Financial Accounting Standards Board. https://asc.fasb.org/
  • FASB Learning Guide. (2009). Codification Learning Guide Lessons 1–6. Financial Accounting Standards Board. https://www.fasb.org/codification/learningguide
  • FASB Video. (2009). FASB Codification Part I and Part II. Financial Accounting Standards Board. https://www.fasb.org/videos
  • Kieso, D. E., Weygandt, J. J., & Warfield, T. D. (2019). Intermediate Accounting (16th ed.). Wiley. ISBN: 9781119527076.
  • Deloitte. (2010). Roadmap to the FASB Accounting Standards Codification. Deloitte Development LLC. https://www2.deloitte.com/
  • PwC. (2011). Using the FASB Codification: Practical Guide. PricewaterhouseCoopers. https://www.pwc.com/
  • EY. (2012). Codification Overview and Research Techniques. Ernst & Young Global Limited. https://www.ey.com/
  • AICPA. (2009). Guide to the FASB Codification. American Institute of Certified Public Accountants. https://www.aicpa.org/
  • Journal of Accountancy. (2009). FASB’s Codification simplifies GAAP research. Journal of Accountancy. https://www.journalofaccountancy.com/

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