|Finance Execs See Pluses in GAAP Codification
CPAs favor FASB ASC five to one. But are you falling behind? Join the survey; get the answers.
August 6, 2009
By a margin of five to one, most accountants who have looked into the new FASB Accounting Standards Codification for GAAP say it will make accounting standards easier to use.
“One stop shopping!!!” agrees Finance Manager Pat Clemens with exclamation marks. Clemens, who works at a California technology company, has already checked out FASB ASC resources on the AICPA and FASB Web sites, and plans to dig in deeper soon.
In a survey of AICPA Insider readers, one out of two (51%) say they have at least looked into the new codification agree that it could save them time and trouble. About 10 percent see no improvements and 16 percent are still undecided, according to the CPA Trendlines survey by Bay Street Group LLC for the AICPA. The results have a margin of error of three percentage points at a 95-percent confidence level.
Are you keeping up with other CPAs on GAAP codification?
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If you haven’t already heard, FASB last month launched its FASB ASC as authoritative. Some are calling it the biggest change to GAAP research n 50 years. The new FASB ASC is now officially the single source of authoritative U.S. accounting and reporting standards for nongovernmental entities and is effective for interim and annual periods ending after September 15, 2009. It replaces a system of GAAP rules built up piece by piece over decades dating back to the Accounting Principles Board (APB).
Debi Gardner, a finance exec at Fort Lauderdale, Fl.-based commercial insurance broker AequiCap, admits she needs to look into the Codification closer, but she sees it as progress. “I do believe that it will make life easier so I am not overly concerned about implementation,” Gardner says. “It will provide ‘one-stop shopping,’ like it is now in the insurance industry, for statutory accounting principles.”
In fact, members in business and industry (B&I) appear to be slightly ahead of their counterparts in public accounting. While three out of four (76%) public accounting practitioners say they’ve at least looked into the topic, more than four-fifths (88%) finance professionals are already on the case.
“I think this is a great step forward,” says Gregory Peters, a finance exec at the architectural firm of RRM Design Group in San Luis Obispo, CA. “I have only spent a couple of hours poking around in the FASB ASC test database,” Gregory says, referring to when it was in verification, before official release. But, “For a private industry user like me, having a single current online resource to check, will give me access to all of the standards, not just whatever old books I might have on the shelf.”
“Simpler should be better,” says Paul R. Jaeb at Marysville, Ohio-based Union Rural Electric Cooperative Inc. “The current standards are lengthy.”
Daniel Krachinsky, GAAP compliance manager at a global mining and natural resources concern, has already looked deeply into the issue. “We have identified the areas where we reference GAAP (i.e. public filings, accounting policies, position papers, etc.) and we are developing a plan to update references,” he says. “Public filings will be first, and we will have those references ready in time for our Q3 filings.”
“Based on limited review of the Codification,” he’s not without some reservations, however. “The material appears to be broken into too many small pieces. While the codification will likely improve the efficiency of researching specific issues, it will make reviewing new standards more cumbersome. I am also concerned that GAAP may be unintentionally changed based on what is left out of the Codification and hence is non-authoritative going forward.”
Indeed, B&I professionals are more likely to like what they see in the FASB ASC, with 74 percent saying they’ve already started digging into the details, compared with 62 percent of public accounting practitioners.
The irony, of course, is that many members in B&I may be relying on their outside auditors to bring them up to date.
For example, Nancy Rische, controller at Overland Park, Kan.-based CNBS LLC, a broker-dealer that caters to the needs of financial institutions, is looking forward to the Codification. “It puts all the information in one place in an organized manner,” she says. But her company “will rely on our auditors to be more aware of the new organization.”
It sounds like many accountants on both sides of the fence have more work to do.
ARE YOU FALLING BEHIND? Join the survey; get the answers.
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Copyright © 2009 CPA Trendlines/BSG LLC. All Rights Reserved. Used by Permission. First published by the AICPA.
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