U.S. GAAP Codification demystified


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FASB's U.S. GAAP codification

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U.S. GAAP Codification demystified

  1. 1. U.S. GAAP Codification demystified…. Sunil Thukral [email_address] www.UGAAP.com Resources – Insights – Information on U.S. GAAP
  2. 2. U.S. GAAP Codification <ul><li>What: </li></ul><ul><li>The Financial Accounting Standards Board's (FASB) Codification is a reorganization of current U.S. GAAP into a topical format that eliminates the current GAAP hierarchy and establishes instead two levels of guidance: </li></ul><ul><ul><li>authoritative and </li></ul></ul><ul><ul><li>nonauthoritative </li></ul></ul><ul><li>The Codification is not intended to change U.S. GAAP and is </li></ul><ul><ul><li>Fully electronic </li></ul></ul><ul><ul><li>Organized by accounting topic </li></ul></ul><ul><ul><li>Expected to streamline accounting research </li></ul></ul><ul><li>Codification includes only selected SEC guidance. </li></ul><ul><li>It was issued on July 1, 2009. </li></ul><ul><li>Effective date for calendar year companies: Q3-2009 financials </li></ul>
  3. 3. U.S. GAAP Codification <ul><li>Why issued? </li></ul><ul><li>- Simplify user access by codifying all authoritative U.S. GAAP in one spot related to a particular “Topic” in one place. </li></ul><ul><li>Does Codification change GAAP? </li></ul><ul><li>- No </li></ul><ul><li>What has changed due to Codification? </li></ul><ul><li>- Codification will affect the way we reference U.S. GAAP in financial statements and in our accounting policies. </li></ul><ul><li>Also changes how we research for any accounting issues. </li></ul>
  4. 4. How does U.S. GAAP referencing change? <ul><li>Notes: </li></ul><ul><li>Accounting Standard Codification (ASC) </li></ul><ul><li>Use “Cross-Reference Tool” within codification to determine the new ASC numbering. </li></ul>ASC 740 Income Taxes FAS 109/ FIN 48 General FASB codification (New) Old referencing ASC 805 Business Combinations FAS 141(R) ASC 830 Foreign Currency Matters FAS 52 ASC 450 Contingencies FAS 5
  5. 5. Comparison for old vs new: <ul><li>Under old GAAP hierarchy: </li></ul><ul><li>Accounting for a nonmonetary transaction is covered in </li></ul><ul><ul><li>APB Opinion No. 29, Accounting for Nonmonetary Transactions ; </li></ul></ul><ul><ul><li>EITF Issue No. 01-2, “Interpretations of APB Opinion No. 29”; </li></ul></ul><ul><ul><li>EITF Issue No. 04-13, “Accounting for Purchases and Sales of Inventory With the Same Counterparty”; or </li></ul></ul><ul><ul><li>EITF Issue No. 93-11, “Accounting for Barter Transactions Involving Barter Credits.” </li></ul></ul><ul><li>Under new Codification: </li></ul><ul><li>Topic 845 (ASC 845, Nonmonetary Transactions ) will contain all of the authoritative guidance on accounting for a nonmonetary transaction. </li></ul>
  6. 6. Structure of Codification
  7. 7. Codification: Next steps <ul><li>We all need to get familiarized with Codification to become familiar with the new structure for U.S. GAAP. </li></ul><ul><li>Any updates would be provided by issuing Accounting standard Updates (ASUs), the guidance would be added within original ASC. </li></ul><ul><li>FASB codification is available on www.fasb.org website. The basic version to access U.S. GAAP is free. </li></ul><ul><li>Use FASB Accounting Standards Codification Quick Reference Guide </li></ul><ul><li>Follow steps outlined on the following pages to access Codification. </li></ul>
  8. 8. Access U.S. GAAP Codification at http://www.fasb.org
  9. 9. Codification: Register as new user
  10. 10. Codification: Register as new user
  11. 11. Codification: Register as new user
  12. 12. Codification: “Login” after registration
  13. 13. Codification: Online tutorials
  14. 14. Codification: View online tutorials
  15. 15. Codification: Online tutorials
  16. 16. U.S. GAAP Codification demystified…. Questions www.UGAAP.com Resources – Insights – Information on U.S. GAAP