FASB Codification System Orientation Paper
Joel Bermudez
ACC/497
January 28, 2015
Nanette Morrow

In a constant developing economy and globalization, a need was created to make a guideline for an easier, clearer, and useful financial reporting system. For this purpose, the Financial Accounting Standards Board (FASB) created the Accounting Standards Codification that was launched on July 1, 2009, for interim and financial reporting after September 15, 2009.
The Financial Accounting Standards Board (FASB) codification system or Accounting Standards Codification (ASC) is a system that compiles all general accepted accounting principles (GAAP) to be used in the United States for public financial reporting. The FASB’s codification system is a database and research system created to compile all the accounting standards and resources into a single, easier to understand and research list of contents. The main purpose of the Accounting Standards Codification (ASC) or the FASB Codification System is to make a guide of accounting principles and regulations, and compile them into an easier to navigate, research, and reference list. By only having a single system of rules to follow, a lot of confusion and extra research and/or work is saved, instead of having an overload of different and separated guidelines and principles where to choose from. The FASB Codification System is divided into nine areas, which in turn are divided into topics, which then are divided into subtopics, and finally divided into sections. The reason for the four classifications or divisions is to be more specific and detailed in the information described and provided within each area of classification. The nine areas located in the FASB Codification System are: General principles, presentation, assets, liabilities, equity, revenue, expenses, broad transactions, and industry. In general principles,