Fasb Accounting Standards Codification And The Hierarchy Of Generally Accepted Accounting Principles

The FASB Accounting Standards Codification® is the source of authoritative generally accepted accounting principles (GAAP) recognized by the FASB to be applied by nongovernmental entities.

In 1973 the Financial Accounting Standards Board (FASB) was established to set the financial accounting standards in the United States of America for nongovernmental entities. These standards are collectively called U.S. Generally accepted Accounting Principles, or U.S. GAAP. The Securities and Exchange Commission (SEC) and the American Institute of Certified Public Accountants acknowledge the authority of these standards (FASB, n.d). A “proven, independent due process” is used to collect the viewpoints of the financial statements prepares and users for the constant improvement of these standards. An Accounting Status Update(ASU) is not an authoritative source however documents the amendments to communicate the changes in the FASB Codification for a user to understand the reason and future of those changes (FASB, n.d).

The purpose of this research paper is to summarize research on codification topic 410 based on the information found in different academic databases. The first part of the paper will focus on the FASB Codification database. The second part of the paper will compare and contrast three other databases on the same codification 410 within the RIA Checkpoint databases: AICPA: Auditing and Accounting Guides, SOX Reporter, and GAAP Practice Manual. A summary of benefits and issues with the searches of each database will also be discussed.

The FASB Accounting Standards Codification® is the source of authoritative generally accepted accounting principles (GAAP) recognized by the FASB to be applied to nongovernmental entities.

In 1973, the Financial Accounting Standards Board (FASB) was created and their mission is “to establish and improve standards of financial accounting and reporting for the guidance and education of the public, including issuers, auditors, and users of financial information.” (FASB.org, 2009a). The FASB is a private, not-for-profit organization whose primary purpose is to develop generally accepted accounting principles (GAAP) within the United States. The Securities and Exchange Commission (SEC) designated the FASB as the organization responsible for setting accounting standards for public companies in the U.S. Therefore, the FASB plays a vital and important role in protecting the financial well being and the overall stability of our

The Standard Codification ASC 830-230-55-1 is described as follows: ASC is the area of theaccounting standard codification, 830 is the topic “Foreign Currency Matter”, 230 is the subtopic“Statement of Cash Flow”, the number 55 is the section “Implementation Guidance and Illustrations”, and finally the number 1 is the paragraph with an “example of a Statement of Cash Flows for Manufacturing Entity With Foreign Operations”. This organization uses the direct method in their Statement of Cash Flow and it is a U.S. manufacturing organization with international operations. This codification illustrates how companies with foreign operation can operate with different currencies at the same time. The disclosure of the fluctuation of the exchange rate is also included the

330-10-35-1 A departure from the cost basis of pricing the inventory is required when the utility of the goods is no longer as great as their cost. Where there is evidence that the utility of goods, in their disposal in the ordinary course of business, will be less than cost

The documents that comprise GAAP vary in format, completeness, and structure. As a result, financial statement preparers sometimes are not sure whether they have the right GAAP; determining what is authoritative and what is not becomes difficult. In response to these concerns, the FASB developed the Financial Accounting Standards Board Accounting Standards Codification. The FASB’s primary goal in developing the Codification is to provide in one place all the authoritative literature related to a particular topic. Professional accountants pay for access to the FASB. The OU Accounting Department has paid for academic access to the FASB Codification. Our Login information is:

This thesis will discuss the proposed changes of pensions and the new updated leases issued by FASB, which are important issues for entities such as corporations. FASB is the Financial Accounting Standards Board. It is a seven-member independent board consisting of accounting professionals who establish and communicate standards of financial accounting and reporting in the United States. FASB was created to provide users accurate information in one location. Recently, FASB developed the FASB Codification Research System: a web-based system allowing registered users to electronically research accounting issues.

Inventories, is similar to the US GAAP definition under Accounting Standards Codification, ASC 330. According to Ernst & Young (2013) article, they are both based on the principle that the primary basis of accounting for inventory is cost. Both define inventory as assets held for sale in the ordinary course of business, in the process of production for such sale or to be consumed in the production of goods or services (pg.71). This which lead to the entries above. Under U.S. GAAP, the company reports inventory on the balance sheet at the lower of expense or market, where business sector is characterized as replacement cost of$180,000, with net realizable value of $190,000 and net realizable value less a normal profit of $152,000. In this case, stock was composed down to replacement cost and provided details regarding the December 31, 2014 asset report at $180,000. A $70,000 loss was incorporated into 2014 income. The company would report inventory on the balance sheet at the lower of cost $250,000 as historical cost and net realizable value as $190,000. Inventory would have been accounted for on the December 31, 2014 asset report a net realizable estimation of $190,000 and a loss on write-down of inventory of $60,000 (the historical cost subtracted from net realizable expense) would have been reflected in net income. IFRS income would be $10,000 bigger than U.S. GAAP net pay. IFRS held earnings would bigger by the same amount.

FASB issues different types of exposure documentation to solicit input on its standards setting activities, includes discussion papers, exposure drafts, preliminary views and comment section. One of standards and rulings that being contemplated through pending exposure draft document of FASB is the proposed accounting standard update on Statement of Cash Flows (Topic 230) specifically on classification of certain cash receipts and cash payments which is a consensus of the FASB Emerging Issues Task Force. The stakeholders has stated there are diversity in the statement of cash flows on how certain cash receipts and cash payment are presented and categorized. This proposal of accounting standards update is to provide solution on eight specific

According to the new standards, “Users of financial statements must be able to assess the amount, timing, and uncertainty of cash flows arising from

FASB implemented FAS 157 because of prior standards having different definitions of fair value and limited guidance for

The purpose of this research report is to understand of two important concepts from the Conceptual Framework for Financial Reporting----the objective of general purpose financial reporting and qualitative characteristics of useful financial information. In this report, Myer Holdings Ltd is as an example to describe these two concepts. This report includes the analysis on whether the disclosure of PPE from Myer Holdings Ltd meets the requirements of AASB 116, especially the requirements of objective

The Financial Accounting Standards Board has issued for public comment two Exposure Drafts related to its disclosure framework project. The first exposure draft proposes amendments to Statement of Financial Accounting Concepts - Conceptual Framework for Financial Reporting, Chapter 3 – Qualitative Characteristics of Useful Financial Information. The purpose of this proposed amendment is to clarify the concept of “materiality”. FASB defines materiality as, information is material if omitting it or misstating it could influence decisions that users make on the basis of the financial information of a specific reporting entity. In other words, materiality is an entity-specific aspect of relevance based on the nature or magnitude or both of the items to which the information relates in the context of an individual entity’s financial report. Consequently, the Board cannot specify a uniform quantitative threshold for materiality or predetermine what could be material in a particular situation.