CPA Resources
CPA Resources

Codification takes effect; AICPA offers tips

July 1 was a landmark day for the accounting profession as the Financial Accounting Standards Board's Accounting Standards Codification (ASC) became the authoritative source of non-governmental 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 Sept. 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 Dec. 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 Tom Hood, executive director of the Maryland Association of CPAs. “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.
  • Visit the AICPA dedicated Web site 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 co-workers 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 numbers, Financial Interpretation numbers, 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 non-governmental 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.

Bookmark and Share

This content has not yet been Rated.

To Rate content, please Login.