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Kayla Briggs
 

FASB ASC: What It Means for CPAs

On June 3, the Financial Accounting Standards Board announced it is officially launching the FASB Accounting Standards Codification™ (FASB ASC) on July 1.

June 15, 2009
by Kayla Briggs, CPA

The FASB Accounting Standards Codification (ASC) represents a major shift in the organization and presentation of U.S. generally accepted accounting principles (GAAP) and is a major restructuring of accounting and reporting standards designed to simplify user access to all authoritative GAAP by providing the authoritative literature in a topically organized structure. To organize them under approximately 90 topics and include all accounting standards issued by a standard setter within levels A–D of the current U.S. GAAP hierarchy, FASB ASC disassembled and reassembled thousands of nongovernmental accounting pronouncements (including those of FASB (Financial Accounting Standards Board), the Emerging Issues Task Force (EITF) and the AICPA). FASB ASC also includes relevant portions of authoritative content issued by the U.S. Securities and Exchange Commission (SEC), as well as selected SEC staff interpretations and administrative guidance issued by the SEC. FASB ASC, however, is not the official source of SEC guidance and does not contain the entire population of SEC rules, regulations, interpretive releases and staff guidance. FASB ASC also does not include governmental accounting standards. ASC is not intended to change GAAP or any requirements of the SEC.

The project aims to:

  • Reduce the amount of time and effort required to solve an accounting research issue.
  • Mitigate the risk of noncompliance with standards through improved usability of the literature.
  • Provide accurate information with real-time updates as new standards are released.
  • Assist FASB with the research and convergence efforts required during the standard setting process.
  • Become the authoritative source of literature for the completed XBRL taxonomy.

Impact on CPAs

On June 3, the FASB announced that it will be launching FASB Accounting Standards Codification™ (FASB ASC) on July 1. The codification will be effective for interim and annual periods ending after September 15, 2009 — meaning preparers must start using it for periods that begin on or about July 1, 2009. Once effective, the codification will be authoritative and supersede all existing non-SEC accounting and reporting standards for nongovernmental entities.

Information and Reference Materials

Do I know about the FASB Accounting Standards Codification as a source of authoritative U.S. accounting and reporting standards for nongovernmental entities on July 1, 2009?

Web page devoted to the codification that contains a wealth of resources, including free archived Webcasts from both the AICPA and the FASB and access to articles and publications. From there, you can link to the AICPA’s FASB ASC Overview and Recent Developments Web page, which is now also available in PDF format (PDF). It explains the scope and structure of the FASB ASC and the FASB ASC Research System, as well as recent events regarding verification and transition provisions for the FASB ASC’s effective date.

To learn more, visit:

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Kayla M. Briggs, CPA, is competency champion at the American Institute of CPAs. Previously she was senior manager at Lucent Technologies where she was involved in recruiting and selecting candidates for the CFO Financial Leadership Development Program (FLDP). She was also responsible for coaching high potential leaders within the continuous learning program for FLDP. In addition, Briggs was adjunct professor at Babson College in the Masters Program for FLDP and responsible for the Lucent CFO NASBA CPE Sponsorship Program.