Assignment 2-3 Applied Accounting Research

1353 WordsAug 31, 20146 Pages
Assignment 2-3 Applied Accounting Research Paper FASB Codification Database Summary For authoritative guidance on accounting rules, one must turn to the Financial Accounting Standard Board’s Codification. Since 2009, FASB has arranged the generally accepted accounting principles (GAAP) into an easier to access format, known as the Codification. One of these pronouncements is FASB 235- Notes to Financial Statements (FASB, ASC 235-10, 2009). In this pronouncement, the overall required structure of disclosure notes is discussed. There are five main points that the financial statement must contain to remain in conformance with the requirements of this pronouncement. All financial statements issued must “present fairly financial position, cash flows, and results of operations in accordance with generally accepted accounting principles (GAAP)” (FASB, ASC 235-10-05-3, 2009). Within the detail of these financial statements, the accountant must include a summary of significant accounting policies (SSAP) (FASB, ASC 235-10-50-1, 2009). This required disclosure entails: the accounting method followed, such as LIFO or FIFO; the manner of applying the accounting method; determination of the method and any changes in financial position; and, lastly, the reason the accounting principle is best for the company for revenue recognition and cost allocation. Also, if the basic financial statements are not presented together, it is still required for each statement to include the SSAP
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