...Brooke Codification Research Paper Acc 303 11/15/2011 Introduction This paper is an analysis of the FASB Accounting Standards Codification and the Research System available through the AAA/FASB website. It will walk the reader through a select few topics focusing on how the codification literature addresses each topic. The first topic analyzed will be the definition of accounting policies. The paper will go on to discuss information available on comprehensive income, as well as net income. Comprehensive income and net income will also be compared and contrasted, with an example to illustrate each. Accounting Policies, as defined in the Codification literature Topic 235, Section 10 of the codification states, “The accounting policies of an entity are the specific accounting principles and the methods of applying those principles that are judged by the management of the entity to be the most appropriate in the circumstances to present fairly financial position, cash flows, and results of operations in accordance with generally accepted accounting principles (GAAP) and that, accordingly, have been adopted for preparing the financial statements.” The FASB codification, when put in place in 2009, redefined many of the internal accounting policies already in place within business entities. Fortunately for many companies, the codification offers a research system to search these new policies. There is also an extensive cross-reference feature which allows users to...
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...FASB Codification Research Project #1 (a) Briefly describe how pension gains and losses are accounted for. According to FASB ASC 715-30-35: 35-21 Gains and Losses Gains and losses that are not recognized immediately as a component of net periodic pension cost shall be recognized as increases or decreases in other comprehensive income as they arise. Accounting for plan terminations and curtailments and other circumstances in which recognition of gains and losses as a component of net periodic pension cost might not be delayed is addressed in the Settlements, Curtailments, and Terminations Subsection of this Section. (b) Explain the rationale behind the accounting method described in part (a). According to FASB ASC 715-30-35 35-22 Gains and Losses Asset gains and losses are differences between the actual return on plan assets during a period and the expected return on plan assets for that period. Asset gains and losses include both changes reflected in the market-related value of plan assets and changes not yet reflected in the market-related value (that is, the difference between the fair value of assets and the market-related value). Gains or losses on transferable securities issued by the employer and included in plan assets are also included in asset gains and losses. Asset gains and losses not yet reflected in market-related value are not required to be amortized under paragraphs 715-30-35-24 through 35-25. 35-23 Gains and Losses In...
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... Fall 2014 Acc 310 Codification Exercise As we have discussed, the Accounting Standards Codification (ASC) is a relatively recent addition to an accounting professional’s toolkit. You will access and employ this platform as a normal part of your studies and in the profession in the days ahead. This assignment is intended to help you to become familiar with this important new platform and to enable you to become better aware of the recent “Revenue Recognition” standard that was discussed briefly earlier in the semester. As a professional on the job, your firm will pay big $$$ for a subscription to the Professional View. Rider has paid for your ability as student to use the information below to access the Codification website: http://aaahq.org/ascLogin.cfm Use the following user name and password: User ID AAA51248 Password s33UYhH This assignment is designed to provide you with a baseline familiarity with the ASC and the terminology associated with the new Revenue Recognition pronouncement. Required: 1. Access the ASC with the user name/password information above and click on the “Help” link for the site. Explore the suggested strategies that may be employed for “searching” ASC content. Describe more specifically how information in the ASC may be identified and retrieved through the use of “Codification Reference” terminology. Starting with the term “Topic,” identify as well the categories...
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...FASB Codification Project The Financial Accounting Standards Board, FASB, was implemented in 1973 in the private sector. It was meant to set up the standards for which financial accounting should operate. Its duty was to establish and improve the standards of financial accounting and reporting the financial matters to the general public as well as guiding and educating them. It also helps the auditors, issuers, and users who benefit from financial information. The FASB codification process includes all the accounting values issued by a standard setter. The standard setter is in the levels ‘A’ right through ‘D’ of the present US Generally Accepted Accounting Principles, GAAP, ladder. Also included is the American Institute of Certified Public Accountants, AICPA, and the Emerging Issues Task Force, EITF (FASB, 1984). The codification process involves the assigning of numbers or letters to documents to enable faster access to those documents as well as their retrieval. The FASB codification project will allow thousands of declarations currently in US GAAP to be organized into about 90 accounting subjects. Contents in every subject are then subdivided into subtopics followed by sections and lastly paragraphs. The paragraph is the sole part that contains the important material. The other higher levels are there to help in arranging the contents of the paragraph. A number is allocated to particular contents in each level (Smith 2005). Then the levels are displayed suitably using...
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...Case Study: FASB Codification Case Question 1: Access the FASB Codification and prepare responses to the following questions, providing Codification references as support for your answers. Access the glossary and give the definition for: Answer: A. Firm Fixed-Price Contract – A Fixed Price Contract is essentially a contract where an adjustment can’t be made because of the cost experience of the contractor or his or her performance under the contract. (FASB, 2012). So in another words, the price quoted is the final price—no extra hidden charges or fees can be added. B. Amortized Cost – Amortized Cost is where the sum of the initial investment minus the cash collected then minus the write-downs plus yield accreted to date. (FASB, 2012). So in another words, an Amortized Cost for a company, for example, is the cost of an asset that is written off as an asset that has depreciated in value. It represents the total accumulated depreciation, and thus the totally amortization, to date. C. Impairment – Impairment is the situation where an asset carries an amount that exceeds it fair market value. (FASB, 2012). So in another words, impairment is when an asset with a long lifespan is overpriced. Question 2: Are there SEC documents as a part of this Codification? If yes, where are they located? A. Was unable to locate any SEC documents for this Codification. B. Yes there are SEC documents as part of this codification, entitled Rule 2a-7 under the Investment...
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...GROUP RESEARCH PROJECT #1 FASB RESEARCH – CHAPTER 1 ISSUES #1 In recording a business combination, the acquiring company must recognize all identifiable intangible assets of the acquired company. This process can be complex and burdensome. Recently, the Private Company Council (PCC)* provided relief from some of these requirements for private (non-public) companies. What was that “relief” and what document was issued that provided it? *PCC is an arm of the FASB that is tasked with proposing amendments to GAAP that would apply only to private (non-public companies). #1) According to the Accounting Standards Update 2014-18, Business Combinations (Topic 805), private companies should no longer “recognize separately from goodwill (1) customer-related intangible assets unless they are capable of being sold or licensed independently from the other assets of the business and (2) noncompetition agreements.” This will cut down the complexity and cost while still providing interested parties with information to make decisions off of. #2 As we saw near the end of Chapter 1, the annual testing for impairment of indefinite life intangibles (such as goodwill) is VERY complicated (very quantitative) and time consuming. A few years ago, the FASB provided a ”qualitative” alternative to the annual impairment test. Briefly describe that alternative and what document was issued that allowed that alternative? #2) This amendment allows companies use a qualitative measurement...
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...Sandra E Matos FASB Codification ACCT 525 Professor Dorothy Brandt Week 3 Abstract The Financial Accounting Standard Board (FASB) was created in 1973 with the purpose of the board is to (according with FASB) establish standards of financial accounting that govern the preparation of financial reports by nongovernmental entities. Those standards are officially recognized as authoritative by the Securities and Exchange Commission (SEC) (Financial Reporting Release No. 1, Section 101, and reaffirmed in its April 2003 Policy Statement) and the American Institute of Certified Public Accountants (Rule 203, Rules of Professional Conduct, as amended May 1973 and May 1979). FASB Accounting Standards Codification (Accounting Standards Codification) which represents the source of authoritative standards of accounting and reporting, other than those issued by the SEC, recognized by the FASB to be applied by nongovernmental entities. Some of those standards are; ASC 830-230-55-1 - Statement of Cash Flows for Manufacturing Entity with Foreign Operations, ASC 926-330-35-1 - Products Held for Sale, ASC 954-440-25-2 - Continuing Care Retirement Community, ASC 505-20-50-1 – Equity, Stock Dividends and Stock Split and Disclosure, ASC 710-10-05-6 - Compensated Absences. FASB Accounting Standards Codification (Accounting Standards Codification) which represents the source of authoritative standards of accounting and reporting...
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...Memorandum To: Professor From: XXX Date: December 14, 2011 Subject: Income tax treatment I appreciate that you choose me to deal with the questions for you, these are really good questions which we should pay attention to. In this memo, I would answer your questions about the specific treatment of your company’s income taxes according to my research in FASB Accounting Standard Codification and other sources. First, you ask about if the income taxes should be considered as an expense for financial reporting purpose. According to my research, I found that most accountants now agree that corporate income tax is an expense. Treating income tax as an expense is required under GAAP. This treatment is consistent with proprietary theory because the earnings that accrue to owners are reduced by corporate obligations to the government. Also, because the income tax does not result from transactions with owners, expensing corporate income tax is consistent with the SFAC No. 6 definition of comprehensive income. Thus, on the surface, accounting for income taxes would appear to be a nonissue. So for your company’s financial reporting, you should treat income taxes as an expense. Your second question is about the difference between intraperiod and interperiod tax allocation and how to differ these two, as well as the effect on financial reporting of these two methods. This is really a good question, because new start-up company would always be confused at this part. Intraperiod tax allocation...
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...FASB Codification Orientation Paper Sara Litko ACC/497 June 15, 2015 Teresa Jenkinson FASB Codification System Orientation This paper will describe the FASB codification system and the purpose of it. This paper will describe the nine content areas located in the FASB codification system. Finally, this paper will describe the types of items that are located under each content area. What is FASB Codification System and its purpose? The Financial Accounting Standards Board (FASB) developed a database and research system. A codification is given FASB for which all accounting standards in a single system known as FASB Codification. The purpose of the FASB codification system is to have a better organized accounting principles and laws to make it easier for the user. In fact, FASB codification reduces the research time as all information available with single search at one place. The nine content areas and the items under them in the codification system The nine content areas located in the FASB Codification system are General Principles, Presentation, Assets, Liabilities, Equity, Revenue, Expenses, Broad Transactions and Industry. The General Principles are used to recognize the accounting principles and framework sources and use them to select the principles that will be used in preparing the nongovernmental entities financial statements. These financial statements are presented in conformity with the GAAP. “Presentation offers guidance on income statement preparation...
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...The Financial Accounting Standards Board (FASB) established a codification system to provide a single source of information for accounting standards. Before, pronouncements from standard setters were separate and time consuming to research. The FASB ASC is a searchable database that significantly reduces the amount of time it takes to find and research pronouncements from the FASB, Emerging Issues Task Force (EITF), Accounting Standards Executive Committee (AcSEC), Accounting Principles Board (APB), level A-D GAAP, and relevant portions issued by the Securities and Exchange Commission (American Accounting Association, n.d.). This database has 90 topics covering thousands of pronouncements. Its purpose is to more efficiently organize accounting principles issued by standard setters. The site is constantly updated to reflect the latest standards so the accountant is assured of the most recent information. The FASB ASC is also intended to reduce the gap between FASB and international accounting standards (HubPages, 2012). The codification system consists of eight content areas. The first topic, Presentation, include 15 categories of information. The first five discusses the presentation of financial statements, balance sheets, statements of shareholders equity, comprehensive income, and income statements (Accounting Standards Codification, 2012). The second category is Assets. The assets section has nine categories with the first three discussing the handling...
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...FASB Codification System Orientation ACC/497 The Financial Accounting Standards Board (FASB) became necessary to accounting standards in order to ensure certain methods and structures are followed. The FASB is not the primary group to hold this responsibility, and because of this confusion can arise from complying with Generally Accepted Accounting Principles (GAAP). In order for the FASB to simplify standards, the Accounting Standards Codifications was established. The FASB ASC is designed to simplify user access to GAAP. Due to the access granted to the FASB, the FASB ASC has a complete source on GAAP. The ASC makes an effort to provide users with updated GAAP information, in an easy to access location. The FASB ASC is able to improve accuracy with accounting practices through the simplified and updated research system. One way that the ASC simplified GAAP, by created nine sections in the ASC. The nine sections include general principles, presentation, assets, liabilities, equity, revenue, expenses, broad transactions, and industry. Each section gives the user guidance on the related field of accounting. Such that the general principles section is considered to be an overview on GAAP and the presentation sections covers the financial statement presentation guidelines. Accounting can be considered living as it continually is evolving with society and the rules and regulations are updated consistently. From the constant feed of change from accounting standards, the...
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...date information. 1. In the Course Home tab of your course shell, click on “FASB Codification Access.” Scroll to the bottom of the page and click on “For tutorials please click on the link here.” Watch and listen to the four tutorial modules and answer the following questions with information you learned in the tutorial, your book and through Internet research: a. Why was codification needed? Ultimately the Codification was needed to simplify access, improves accuracy of research and mitigates risk of non-compliance. The research process is now streamlines, there are real-time updates, and it assists with the IFRS convergence efforts. b. What is the goal of codification? FASB had three primary goals when creating the codification: 1. Simplify user access by codifying all authoritative US GAAP in one spot. 2. Ensure that the codified content accurately represented authoritative US GAAP as of July 1, 2009. 3. Create a codification research system that is up to date for the released results of standard-setting activity. c. What authoritative literature does the codification supersede? The codification in Statement No. 168 supersedes Statement No. 162 - The Hierarchy of Generally Accepted Accounting Principles. d. How is the codification structured? Include as discussion of the topic, subtopics, sections and subsections in your answer. The Codification is organized into Areas, Topics, Subtopics, and Sections. Each Area, Topic, and Subtopic...
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...According to FASB (2012), “The FASB Accounting Standards Codification is the source of authoritative generally accepted accounting principles (GAAP) recognized by the FASB to be applied to nongovernmental entities” (FASB Accounting Standards Codification, Para. 1). The FASB accounting standards codification is basically a record of bookkeeping data that will allow clients to browse amongst thousands of GAAP proclamations that are put into about 100 issues. The system is planned to help lessen the convulsion of nongovernmental standards, at the same time as smoothing the progress of the augmented must for international standards. Since this system is basically a trustworthy basis for GAAP, the system matters are planned to diminish the quantity of values, and the ones who set the values, with the direction of the Securities and Exchange Commission. The main purpose of the FASB Codification System is to help integrate and synthesize existing GAAP and not to create new GAAP. It creates one level of GAAP which is considered authoritative. The FASB Codification Research System (CRS) is an-on-line real time data base that provides easy access to the Codification. The Codification and the related CRS provides a topically organized structure that is subdivided into topic, subtopics, sections, and paragraphs. The nine content areas located in the FASB Codification System are: General Principles, Presentation, Assets, Liabilities, Equity, Revenue, Expenses, Broad...
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...FASB Codification System Orientation Paper Millay Dimond June 15, 2015 ACC 497 Shonda Meadows FASB Codification System Orientation Paper In effort to create a system to aid professionals when researching accounting principles, the Financial Accounting Standards Board created the FASB Codification System. The new Codification system is widely accepted as the source of authoritative United States Generally Accepted Accounting Principles. This paper will explain the FASB Codification System and its purpose as well as describe the nine con tent areas located n the FASB codification system. FASB Codification System is a database and research system developed by the Financial Accounting Standards Board that pulls together many of the authoritative resources about accounting standards into a single, searchable system. The purpose of this system is to better organize accounting principles and laws to simplify user access. Codification is intended to reduce the complexity of nongovernmental accounting standards, while facilitating the increased need for international accounting standards. As the authoritative source for US GAAP, Codification topics are intended to reduce the amount of standards, and standard setters, with the guidance of the Securities and Exchange Commission. The nine content areas located in the system include Presentation, Assets, Liabilities, Equity, Revenue, Expenses, Broad Transactions, and Industry. Presentations offers guidance on income statement preparation...
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...FASB Codification System Orientation Paper Janet Osegueda University of Phoenix Advanced Topics in Accounting Research ACC/497 Raymond Clark, Instructor July 3, 2014 FASB Codification System Orientation Paper The FASB Codification System is a database and research system that was developed by the financial Accounting Standards Board. It authentically pulls together many different resources about the accounting standards and it puts it into a single searchable system. The main purport of the FASB Codification System is to have a more preponderant organization of the accounting principles and laws. Another main purport is to have everything simplified for reduce the research time and it avails the accounting professionals do their work more efficiently and efficaciously. The nine content areas located in the FASB are the following General Principles, Presentations, Assets, Liabilities, Equity, Revenue, Expenses, Broad transactions and Industry. The general principles cover the Generally Accepted Accounting Principles which identifies the transmutations to the accounting standards updates. Each subtopic covers the updates to the GAAP guidelines, modifications done to the guidelines, content grandfathered in after the engenderment of the Codification system. The presentation section gives guidance on the income verbal expression preparations, the notes for financial verbalizations, withal for calculating earnings per share. The assets section...
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