FASB Codification Article from AICPA

FASB Accounting Standards Codification:

A Primer For Audit Committees

This major restructuring of accounting and reporting standards is designed to simplify user access to all authoritative GAAP.

What is FASB Accounting Standards Codification?

The Financial Accounting Standards Board’s Accounting Standards Codification (FASB ASC) represents a major shift in the organization and presentation of U.S. generally accepted accounting principles (GAAP). This major restructuring of accounting and reporting standards is designed to simplify user access to all authoritative GAAP by providing the authoritative literature in a topically organized structure.

What steps were taken to achieve FASB ASC?

FASB ASC disassembled and reassembled thousands of nongovernmental accounting pronouncements (including those of FASB, the Emerging Issues Task Force, and the AICPA) to organize them under approximately 90 topics and include all accounting standards issued by a standard setter in levels A–D of the current U.S. GAAP hierarchy. FASB ASC also includes relevant portions of authoritative content issued by the SEC, plus selected SEC staff interpretations and administrative guidance issued by the SEC.

What else do I need to know about FASB ASC?

FASB ASC is not the offi cial source of SEC guidance and does not contain the entire population of SEC rules, regulations, interpretive releases and staff guidance. Moreover, FASB ASC does not include governmental accounting standards. ASC is not intended to change U.S. GAAP or any requirements of the SEC.

Among other things, the FASB ASC project aims to:

• Reduce the time and eff ort 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 research and convergence eff orts required during the standard setting process

• Become the authoritative source of literature for the completed XBRL taxonomy

When will this have an impact on my company?

On June 3, the Financial Accounting Standards Board announced it is officially launching the FASB Accounting Standards Codifi cation™ (FASB ASC) on July 1. The codifi cation will be eff ective for interim and annual periods ending after September 15, 2009 – meaning preparers must start June 2009

AUDIT COMMITTEE BRIEF
From the Audit Committee Effectiveness Center 2510-347

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This publication has not been approved, disapproved or otherwise acted upon by any senior technical committees of, and does not represent an offi cial position of, the American Institute of Certifi ed Public Accountants. It is distributed with the understanding that the contributing authors and editors, and the publisher, are not rendering legal, accounting, or other professional services in this publication. If legal advice or other expert assistance is required, the services of a competent professional should be sought.

© 2009 The American Institute of Certifi ed Public Accountants