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Codification

In: Business and Management

Submitted By wintercoffee
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ACCT 5101 (Section 004)
Homework Assignment #1 (2011-9-13-Tuesday)

Jonathan Nam

1. Briefly describe the primary purposes for the development of the codification.

• Simplify user access by codifying all authoritative US GAAP in one spot. • Ensure that the codified content accurately represented authoritative US GAAP as of July 1, 2009. • Create a codification research system that is up to date for the released results of standard-setting activity. • Reduce the amount of time and effort to solve an accounting research issue. • Mitigate the risk of noncompliance through improved usability of the literature. • Provide accurate information with real-time updates as Accounting Standards Updates are released. • Assist the FASB with the research and convergence efforts.

2. Briefly describe the purpose and content of the “What’s New” link.

It aims to provide descriptions of recent modifications and enhancements to the FASB Accounting Standards Codification website. The existing already-issued content has been moved to the “Recently Issued” section, therefore one may expect to have only recent changes/enhancements in codification in the “What’s New” link. You will browse the recent updates of codification, which are categorized by diverse topics on the left tool bar.

3. a) Describe the hierarchy of the topical structure of the FASB’s Codification. List the main sources of GAAP that are included in the Codification.

The hierarchy is, from top to bottom, Topic-Subtopics-Sections-Subsections. Topics are a collection of related guidance, residing in five main areas of 1) general principles, 2) presentation, 3) financial statement accounts, 4) broad transactions and 5) industry. They correlate very closely to standards by the IASB. In terms of GAAP items, you will have Assets (Cash and cash

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