Accounting Standards Codification Essay

Topics: Financial Accounting Standards Board, Accounting organizations, Topical Pages: 3 (821 words) Published: October 8, 2013
Previously, the documents that detailed the rules and regulations of the Generally Accepted Accounting Principles (GAAP) varied in structure, format, and completeness. These variations led to confusion among users and it became more difficult to determine if they were using GAAP correctly. In response to this problem, the FASB developed the Accounting Standards Codification (ASC) whose main purpose is to provide users access to all of the generally accepted accounting principles in one place. The Codification eliminates obsolete information and presents all of the material in the same format and structure. The Codification is now considered the authoritative source for GAAP for all nongovernmental entities. The FASB implemented the Codification with multiple intentions and goals for the new system. The three primary goals included: providing user access to all authoritative US GAAP in one location, guaranteeing that all codified content is an accurate representation of US GAAP, and developing a new research system that continuously updates results of the standard-setting activity. In order to simplify user access to the authoritative US GAAP there needed to be structural changes; this included switching the original standards-based model, which consisted of thousands of individual standards, to a topically based model that comprises of 90 topics. To ensure that all codified standards were accurately represented, the FASB implemented multiple tiers to review all of the information and a monitoring system to follow all of the activity occurring. If any problems arise from the changes within the codifying they will be brought to the attention of FASB employees and will be dealt with accordingly by the Financial Accounting Standards Board. In addition to the Codification, the FASB also created the Codification Research system to ensure that users have access to the most up-to-date information in regards to the standard-setting activities. In addition to its primary...
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