GAAP Codification

On January 15, 2008, the Financial Accounting Standards Board (FASB) released the FASB Accounting Standards Codification^TM (the codification) for a 1-year verification period. The codification is expected to go live and become effective on July 1, 2009. The codification has disassembled and reassembled thousands of accounting pronouncements (including those of FASB, EITF, and the AICPA) to organize them under approximately 90 topics. The codification does not change U.S. generally accepted accounting principles (GAAP); rather it is part of FASB’s efforts to reduce the complexity of accounting standards and also to facilitate international convergence. Among other things, the project aims to

• Reduce the amount of time and effort required to solve an accounting research issue.
• 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.
• Assist FASB with the research and convergence efforts required during the standard setting process.
• Become the authoritative source of literature for the completed XBRL taxonomy.

After completing the one-year verification period, FASB is expected to formally approve the codification as the single source of authoritative U.S. accounting and reporting standards, other than guidance issued by the Securities and Exchange Commission (SEC).

We encourage you to spend time on the codification Web site and provide feedback to FASB.

We have compiled a number of resources to help you understand the major shift that the Codification represents. Over the next several months, we will be providing additional resources. Please check back periodically.

• FASB Accounting Standards Codification^TM Web site
  The official Web site for the GAAP Codification during the 1-year verification period. Access the codified content and provide feedback to the FASB.

• Introduction to the GAAP Codification
  A concise summary of the GAAP Codification.

• FASB notice to constituents
  The notice to constituents provides information you should read to obtain a good understanding of the codification history, content, structure, and future consequences.

• FASB press release about July 1, 2009 effective date

• Updates to the Codification made since the initial January 2008 release

• Archived FASB webcast
  Presented by the FASB on March 13, 2008, Panelists Larry Smith and Tom Hoey discuss and demonstrate the use of the GAAP Codification.

• AICPA webcast: Understanding FASB’s Accounting Standards Codification
  On May 15, 2008, the AICPA held a free informational webcast. This webcast is now available on demand for free. (There are no CPE credits offered for the on demand version, so please ignore references on the webcast to CPE codes.)

• Framing the Future: A First Look at the FASB’s GAAP Codification
  Read this informative article from the May 2008 Journal of Accountancy.

• AICPA press release

• Codification Financial Reporting Alert
  In August 2008, the AICPA will release a Financial Reporting Alert entitled "FASB Codification Developments—2008." This Financial Reporting Alert is intended to provide accountants practicing in business and industry with a better understanding of the FASB Accounting Standards Codification™, outline the structure of the codification, and provide case studies on navigating the FASB Accounting Standards Codification™ Research System and performing accounting research. This alert provides an overview of the codification project, including the scope of the project, guidance affected, transition information, new terminology used in the codification, special features, the verification process, and how the FASB plans to issue updates to the codification. The case study examples will show you how to effectively use many of the codification tools and features. Order your copy of this alert.