U.S. GAAP Codificationdemystified….

Sunil Thukralinfo@UGAAP.com

www.UGAAP.comResources – Insights – Information on U.S. GAAP

U.S. GAAP CodificationWhat:• The Financial Accounting Standards Board's (FASB) Codification is a

reorganization of current U.S. GAAP into a topical format that eliminates the current GAAP hierarchy and establishes instead two levels of guidance:

– authoritative and – nonauthoritative

• The Codification is not intended to change U.S. GAAP and is– Fully electronic– Organized by accounting topic– Expected to streamline accounting research

• Codification includes only selected SEC guidance.• It was issued on July 1, 2009.

Effective date for calendar year companies: Q3-2009 financials

U.S. GAAP CodificationWhy issued?- Simplify user access by codifying all authoritative U.S.

GAAP in one spot related to a particular “Topic” in one place.

Does Codification change GAAP? - No

What has changed due to Codification?- Codification will affect the way we reference U.S.

GAAP in financial statements and in our accounting policies.

- Also changes how we research for any accounting issues.

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How does U.S. GAAP referencing change?

Old referencing

General FASB codification (New)

FAS 5 ASC 450 Contingencies

FAS 52 ASC 830 Foreign Currency Matters

FAS 109/ FIN 48 ASC 740 Income Taxes

FAS 141(R) ASC 805 Business Combinations

Notes: Accounting Standard Codification (ASC) Use “Cross-Reference Tool” within codification to

determine the new ASC numbering.

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Comparison for old vs new:

Under old GAAP hierarchy: Accounting for a nonmonetary transaction is covered in

– APB Opinion No. 29, Accounting for Nonmonetary Transactions; – EITF Issue No. 01-2, “Interpretations of APB Opinion No. 29”; – EITF Issue No. 04-13, “Accounting for Purchases and Sales of

Inventory With the Same Counterparty”; or – EITF Issue No. 93-11, “Accounting for Barter Transactions

Involving Barter Credits.”

Under new Codification: Topic 845 (ASC 845, Nonmonetary Transactions) will contain all of the authoritative guidance on accounting for a nonmonetary transaction.

Structure of Codification

Codification: Next steps

• We all need to get familiarized with Codification to become familiar with the new structure for U.S. GAAP.

• Any updates would be provided by issuing Accounting standard Updates (ASUs), the guidance would be added within original ASC.

• FASB codification is available on www.fasb.org website. The basic version to access U.S. GAAP is free.

• Use FASB Accounting Standards Codification Quick Reference Guide

• Follow steps outlined on the following pages to access Codification.

Access U.S. GAAP Codification at http://www.fasb.org

Codification: Register as new user

Codification: Register as new user

Codification: Register as new user

Codification: “Login” after registration

Codification: Online tutorials

Codification: View online tutorials

Codification: Online tutorials

U.S. GAAP Codification

demystified….Questions

www.UGAAP.comResources – Insights – Information on U.S. GAAP