Acc497 week 1 fasb codification system orientation paper

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Acc497 week 1 fasb codification system orientation paper

  1. 1. RUNNINGHEAD: FASB CODIFICATION SYSTEM ORIENTATION PAPER FASB Codification System Orientation Paper Student ACC497 January 22, 2014 Professor
  2. 2. FASB Codification System Orientation Paper Introduction In 1973, the Financial Accounting Standards Board (FASB)was identified as the private sector organization to establish financial accounting standards that oversee the compliance of all financial reports created by nongovernmental businesses. They were standards accepted as authoritative by the Securities and Exchange Commission (SEC), and the American Institute of Certified Public Accountants (AICPA). Accountants today must utilize these regulations established in accordance with generally accepted accounting principles, GAAP when producing a companys' financials. This paper discusses the FASB Codification System, the purpose, and the contents. The FASB Codification System The FASB Codification System is a single database developed to house the principles and standards authorized by GAAP. The platform provides access to the financial statement which saves time researching consistent information in a single source. The ultimate reason for this system is to address GAAP principles quickly and spend less time researching ("Faf And Aaa Joint Offer To Provide Fasb Codification And Gars Online To Accounting Faculty And Students", n. d.). The Purpose of FASB Codification System According to "Moaten Professional Accountants" (n. d.), "The purpose of the FASB Codification system is to make the accounting standards easier to find and navigate through by using one online database under a mutual referencing system." Businesses can extract information to produce their companys' financial reports, which allows for uniformity of the information imparted and acts to prevent the risk of non-compliance ("Moaten Professional Accountants", n. d.).
  3. 3. FASB Codification System Orientation Paper Contents of the FASB Codification System The FASB Codification System consists of nine areas split by topics for ease of access by the user. The individual topics list GAAP, presentation, assets, liabilities, equity, revenue, expenses, broad transactions, and industry with explanations about GAAP as to status, overview, background, and the objectives for use of ease by the nongovernmental entities in the preparation of financial reporting in accordance with GAAP. The presentation portion identifies various forms of financial statements. The asset portion lists cash, cash equivalents receivables, investments, inventories, and other assets, deferred costs, intangibles, and property, plant, and equipment. The liabilities portion provides information to reporting liabilities for different and unusual businesses, including special liabilities such as disposal costs, commitments, debt, and others. The equity portion shows increases/decreases in a companys' stockholdings through dividends, splits, treasury stock, and spinoffs. The revenue portion provides direction for nonprofits, the federal government, and healthcare companies. Expenses provide details of costs and services, salaries, research and development, and income tax. Broad transactions cover 14 areas identifying a various number of sections such as, business combinations, consolidation, financial instruments, including foreign currency. The industry portion is the last section;. This section provides information on agricultures, airlines, contractors, development stage entities, entertainment, extractive activities, financial services, and non-profits just to name a few. Conclusion The FASB Codification System database is ideal for accountants who prepare financial statements. The information is detailed, yet simplified for easy research and understanding of financial information in accordance with GAAP. This new system provides real-time updates to prevent the possibility of non-compliance.
  4. 4. FASB Codification System Orientation Paper References FAF and AAA joint offer to provide FASB codification and GARS online to accounting faculty and students. (n.d.). Retrieved from http://aaahq.org/FASB/Access.cfm FASB Accounting Standards Codification. (2012). About the FASB Accounting Standards Codification Research System Website. Retrieved from https://asc.fasb.org/about FASB Accounting Standards Codification. (2012). Retrieved from https://asc.fasb.org/home&agreed=1 Moaten professional accountants. (n. d.). Retrieved from http://moatenaccounting.blogspot.com/2013/01/what-is-fasb-codification-systemwhat.html

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