While the accounting requirements CPAs and other financial leaders must follow remain complex, this new Web site is intended to make the research process easier and less time consuming. This important change will have an impact on practitioners, preparers of financial statements, financial statement users, academics, and students preparing to sit for the Uniform CPA Exam.

FASB Codification
In January 2008, FASB released the Codification, which organizes all U.S. generally accepted accounting principles (GAAP) pronouncements into roughly 90 topic areas. The Codification incorporates thousands of pronouncements from a variety of different standard setters, including FASB, the AICPA’s Accounting Standards Executive Committee, the Emerging Issues Task Force, and the Securities and Exchange Commission (SEC). It does not include governmental accounting standards.

Verification period
Stakeholders have a one-year verification period to review the Codification and provide feedback on the accuracy of the content. The Codification is free to use, but registration is required. During the verification process, content will be updated based on feedback and new standards. When approved, the Codification will become the sole source of authoritative GAAP. Approval is expected in April 2009.

The value for practitioners and preparers
FASB hopes the Codification will improve compliance and reduce the time and effort it takes to conduct accounting research. Real-time updates to the Codification will be made as new standards are released.

Management of all organizations is responsible for the presentation of financial statements, including disclosures, in conformity with GAAP. Access to all standards in one place will assist management in fulfilling their responsibilities related to financial reporting.

Changes in standards
The Codification is not intended to change or add to U.S. GAAP. The AICPA Private Companies Practice Section (PCPS) Technical Issues Committee (TIC), chaired by LarsonAllen Assurance and Accounting Principal Steve Bodine, is reviewing the Codification for clarity, consistency, and to ensure it does not contain any inadvertent changes. “The Codification will give stakeholders one authoritative source when conducting accounting research,” states Bodine.

The future of standard setting
This project also gives us a glimpse into the future of standard setting. New standards will be composed of two items, the standard and an appendix of Codification update instructions. New standards will be numbered YY-XX, where YY identifies the last two digits of the year and XX is the sequential number of the update. All authoritative GAAP will be issued and numbered in this format regardless of how such guidance was previously issued (i.e., EITF Abstracts, FASB Staff Positions, FASB Statements, FASB Interpretations, etc.).

Try it out
The FASB is encouraging CPAs and other financial leaders to review the Codification during the verification period, so they can provide feedback to the board and begin to familiarize themselves with it.

Keep in mind that the Codification has not yet been approved as authoritative, and FASB suggests results be verified for accuracy.

For more information, contact Steve Bodine, assurance and accounting principal, at 1-888-529-2648.