Accounting Standards Codification

In US accounting practices, the Accounting Standards Codification is the current single source of United States Generally Accepted Accounting Principles (GAAP). It is maintained by the Financial Accounting Standards Board (FASB).

FASB Accounting Standards Codification

The codification is effective for interim and annual periods ending after September 15, 2009. All existing accounting standards documents are superseded as described in FASB Statement No. 168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles. All other accounting literature not included in the Codification is non-authoritative.

The Codification reorganizes the thousands of U.S. GAAP pronouncements into roughly 90 accounting topics and displays all topics using a consistent structure. It also includes relevant U.S. Securities and Exchange Commission (SEC), guidance that follows the same topical structure in separate sections in the Codification.

To prepare constituents for the change, the FASB has provided a number of tools and training resources.[1]

While the Codification does not change GAAP, it introduces a new structure—one that is organized in an easily accessible, user-friendly online research system. The FASB expects that the new system will reduce the amount of time and effort required to research an accounting 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, and assist the FASB with the research efforts required during the standard-setting process.

Structure

Each ASC reference is structured as a series of four numbers separated by dashes: a three-digit Topic (the first digit of which represents an Area), a two-digit Subtopic, a two-digit Section, and a two- or three-digit Paragraph. [2]

Topic Series Area
100 General Principles
200 Presentation
300 Assets
400 Liabilities
500 Equity
600 Revenue
700 Expenses
800 Broad Transactions
900 Industry

Subtopic 10 is always "Overall."

Section numbers are standardized across topics (not all subtopics have all sections):

Section number Section title
00 Status
05 Overview and Background
10 Objectives
15 Scope and Scope Exceptions
20 Glossary
25 Recognition
30 Initial Measurement
35 Subsequent Measurement
40 Derecognition
45 Other Presentation Matters
50 Disclosure
55 Implementation Guidance and Illustrations
60 Relationships
65 Transition and Open Effective Date Information
70 Grandfathered Guidance
75 XBRL Elements

For instance, 210-10-20 is Balance Sheet, Overall, Glossary. 605-40-25-1 is Revenue Recognition, Gains and Losses, Recognition, first paragraph.

See also

References

  1. ↑ Financial Accounting Standards Board. News Release, 07/01/09.
  2. ↑ "Codification Learning Guide". Financial Accounting Standards Board. October 26, 2015. Retrieved April 22, 2017.
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