Goodbye to FAS 157, 141R, 142… hello to the new Codification

BVWireIssue #88-4
January 27, 2010

If the world of financial accounting wasn’t complicated enough, last summer the Financial Accounting Standards Board issued Statement No. 168, The FASB Accounting Standards Codification™ and Hierarchy of Generally Accepted Accounting Principles (FASB ASC). On its effective date (for financial statements ending after Sept. 15, 2009), the FASB ASC became the source of authoritative U.S. accounting and reporting standards for nongovernmental entities, superseding all then-existing, non-SEC accounting and reporting standards for the same. To provide further guidance, later in the year, the FASB issued its Notice to Constituents (v 3.0): Accounting Standards Codification™, About the Codification.

More recently, the AICPA has posted Financial Accounting Standards Board Accounting Standards Codification™, Overview and Recent Developments. “The U.S. accounting and reporting standards (for nongovernmental entities) as we know them cease to exist as authoritative guidance,” it says. “That means no more FASB statements and interpretations, AICPA accounting Statements of Position (SOPs), and so forth. Those standards that you’ve come to memorize [such as FAS 141R, 142, etc.] have a new FASB ASC reference to which you can refer.” Of course, the overhaul from a standards-based model (with thousands of individual standards) to a topically based model (with roughly 90 topics) is meant to simplify user access—but the new system will take time for analysts, auditors, and accountants to learn and apply.
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