Jan. 15, 2008

• Also See Codification Article Issues Briefing

  U.S. GAAP consists of thousands of pronouncements issued by standard setters, including the FASB, the AICPA’s Accounting Standards Executive Committee, the Emerging Issues Task Force, and the Securities and Exchange Commission.
  
  
• In 2004, the trustees of the Financial Accounting Foundation approved the FASB Accounting Standards Codification™ project. FASB’s goal for the Codification was a compilation of existing US GAAP organized by accounting topic, irrespective of the source (e.g., FASB, EITF, AcSEC).
  
  
• On Jan. 15, 2008, FASB released the Codification for a verification period of one year. During this time, interested parties may use the Codification Research System free of charge to research accounting issues and provide feedback. In addition to offering users an opportunity to submit feedback before adoption, the verification will give them a chance to learn how to use the codification effectively. Users who wish to review the Codification may register at http://asc.fasb.org.
  
  
• The Codification does not change GAAP. The goal of the Codification is to provide a more user-friendly, topically organized set of standards that decreases the research time necessary to address accounting issues.
  
  
• The Codification reorganizes the thousands of GAAP pronouncements into roughly 90 accounting topics.
  
  
• FASB expects the Codification will:

(a) Reduce the amount of time and effort required to solve an accounting research issue.

(b) Improve usability of the literature thereby mitigating the risk of noncompliance with standards.

(c) Provide real-time updates as new standards are released.

(d) Assist the FASB with the research and convergence efforts required during the standard-setting process.

(e) Become the authoritative source of literature for the completed XBRL taxonomy.

• The Codification includes all the following standards:
  

– FASB

• Statements (FAS)
• Interpretations (FIN)
• Technical Bulletins (FTB)
• Staff Positions (FSP)
• Staff Implementation Guides (Q&A)

– Emerging Issues Task Force

• Abstracts
• Topic D

– Derivative Implementation Group (DIG) Issues

– Accounting Principles Board (APB) Opinions

– Accounting Research Bulletins (ARB)

– Accounting Interpretations (AIN)

– AICPA

• Statements of Position (SOP)
• Audit and Accounting Guides (AAG) – only incremental accounting guidance
• Practice Bulletins (PB)
• Technical Inquiry Service (TIS) – only for software revenue recognition

Also included will be relevant SEC guidance that will follow the same topical structure in separate sections of the Codification.

• After FASB addresses the issues raised during the feedback process, it is expected to adopt the Codification as the single source of authoritative U.S. GAAP, other than guidance issued by the SEC.
  
  
• The Codification will affect all AICPA members, including preparers, auditors, tax practitioners, financial statement users, academics and students. It will have ramifications for the Institute’s entire product line, including CPE, conferences, and A&A publications, as well as the CPA Exam.
  
  
• The AICPA supports the Codification because it organizes and simplifies U.S. GAAP and is encouraging its members to comment during the verification period.
  
  
• To register on the Codification Research System, please visit http://asc.fasb.org.