Accounting Standards Codification
Introduction In US accounting practices, the '''Accounting Standards Codification''' ('''ASC''') is the current single source of United States Generally Accepted Accounting Principles (GAAP). It is maintained by the Financial Accounting Standards Board (FASB).
FASB accounting standards codification The codification is effective for interim and annual periods ending after September 15, 2009.All prior accounting standards documents were superseded as described in FASB Statement No. 168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles. Accounting literature not included in the Codification is non-authoritative.The Codification reorganizes the thousands of U.S. GAAP pronouncements into roughly 90 accounting topics and displays all topics using a consistent structure. It also includes relevant U.S. Securities and Exchange Commission (SEC) guidance that follows the same topical structure in separate sections in the Codification.To prepare constituents for the change, the FASB provided a number of tools and training resources.The Codification did not change GAAP, but it introduced a new structure, organized in an easily accessible, user-friendly online research system. The Codification is publicly available. The FASB expected the system to reduce the amount of time and effort required to research accounting issues, mitigate the risk of noncompliance with standards through improved usability of the literature, provide accurate information with real-time updates as new standards are released, and assist the FASB with the research efforts required during the standard-setting process.
Goal The three primary goals of the codification are "simplify user access by codifying all authoritative U.S. GAAP in one spot, ensure that the codification content accurately represented authoritative U.S. GAAP as of July 1, 2009, and to create a codification research system that is up-to-date for the released results of standard-setting activity." The codification was made to make accounting standards easier to find through a single database.
Leading up to the codification process Before the Codification, accounting standards lacked a consistent and logical structure. For the last 50 years, U.S. GAAP consisted of thousands of standards with multiple standard setters. The old U.S. GAAP were difficult to interpret, and the complexity of the standards made it hard for users to stay up to date. Problems with the old standards increased financial reporting risk and led to inefficiencies that increased cost. The Financial Accounting Standards Advisory Council then voiced its concerns due to the increase of financial reporting guidance from the old U.S. GAAP standards, and the FASB responded by launching a new project to codify the standards. The project was approved in September 2004 by the Trustees of the Financial Accounting Foundation.
Public access to codification All users must register to view any codification information. The codification allows a free basic view or paid professional view to the public. The professional view requires an annual subscription up to $940 depending on concurrent users. Discounts may apply to multiple concurrent users. The codification is used by accounting and reporting professionals, analysts and investors.
Structure Each ASC reference is structured as a series of four numbers separated by hyphens: a three-digit Topic (the first digit of which represents an Area), a two-digit Subtopic, a two-digit Section, and a two- or three-digit Paragraph. Topic Series  Area 100  General Principles 200  Presentation 300  Assets 400  Liabilities 500  Equity 600  Revenue 700  Expenses 800  Broad Transactions 900  IndustrySubtopic 10 is always "Overall. "Section numbers are standardized across topics (not all subtopics have all sections): Section number  Section title 00  Status 05  Overview and Background 10  Objectives 15  Scope and Scope Exceptions 20  Glossary 25  Recognition 30  Initial Measurement 35  Subsequent Measurement 40  Derecognition 45  Other Presentation Matters 50  Disclosure 55  Implementation Guidance and Illustrations 60  Relationships 65  Transition and Open Effective Date Information 70  Grandfathered Guidance  75  XBRL ElementsFor instance, 210-10-20 is Balance Sheet, Overall, Glossary. 605-40-25-1 is Revenue Recognition, Gains and Losses, Recognition, first paragraph.
See also * List of FASB pronouncements
References
External links * https://asc.fasb.org