Fasb Codification System Orientation Paper

What is the FASB Codification System?

The FASB Codification System is a database and research system that was developed by the financial Accounting Standards Board. It actually pulls together many different resources about the accounting standards and it puts it into a single searchable system.

What is the purpose of the FASB Codification System?

The main purpose of the FASB Codification System is to have a better organization of the accounting principles and laws. Another main purpose is to have everything simplified for reduce the research time and it helps the accounting professionals do their work more efficiently and effectively.

What are the nine content areas located in the FASB Codification System? What types of items are located under each content area?

The nine content areas located in the FASB are; general principles, presentations, assets, liabilities, equity, revenue, expenses, broad transactions and industry.

The presentation section gives guidance on the income statement preparations, the notes for financial statements, also for calculating earnings per share.

The assets section contains the information for receivables, inventory, and investments.

The liabilities section contains information on liabilities such as asset retirements, environmental obligations, commitments, contingencies, guarantee, and debts.

The equity section discusses the stock dividend, stock splits, treasury stock as well as the financial services such as depository, lending, insurance, and investment companies.

The revenue area in intended to give insight on the revenue recognition and any updates to the accounting standards that will affect the revenue recognition.

The expense section describes the measures that are required for reporting compensations that includes stock compensations; research, development, and it help with the preparation of income taxes.

The broad transactions section contains information on business combinations, consolidation, fair value measurements, disclosures, leases, reorganizations, subsequent events, and financial instruments.

The industry section shows the user data in the different type of industries.

Conclusion

As you can tell the FASB Codification System is something that was needed in the accounting world. It helps with all the needs for accurate and up to date accounting, it has nine main sections that helps identify and research areas with the ease. It is in compliance with all accounting laws and regulations, so the professional accountants have little to worry about while using the FASB Codifications Systems.