The Financial Accounting Standards Board

The Financial Accounting Standards Board (FASB) is the new widely accepted Codification system source of authoritative United States Generally Accepted Accounting Principles (USGAAP). The FASB Codification System is a database of accounting information. The website allows people to search thru thousands of US GAAP pronouncements that are prepared in around 90 different topics. Codification is used to decrease the complexity of nongovernmental accounting standards and in return increase the need for international accounting standards. The FASB uses the guidance of the Securities and Exchange Commission (SEC) to reduce the amount of standards and standard setters.

The purpose of the FASB Codification System is to improve the organizing of the accounting principles and laws to make the user access easier. The FASB Codification System can lessen the amount of time spent researching accounting topics and in return allowing accounting professional more time too efficiently and effectively perform their work. The FASB Codification System allows accounting professionals to decrease the risks of noncompliance with the help of real time updates on all the new standards. The FASB Codification Systems helps users understand the differences between FASB, accounting practices, and international accounting standards.

The FASB Codification System includes nine content areas that cover all accounting areas. The first content area is General Principles. The General Principles area relates to broad conceptual matters. The second content area is the Presentation area. The Presentation area focuses on how information is presented in the financial statements. The third, forth, and fifth content areas are Assets, Liabilities, and Equity. These content areas include guidance about certain balance sheet accounts including; cash, additional paid-in-capital, and accounts payable. The sixth and seventh content areas are Revenue and Expenses. The Revenue and Expenses include guidance about certain income statement accounts including; employee compensation and sales revenue. The eighth content area is Broad Transactions Area. The Broad Transactions area includes guidance about multiple financial statement accounts. The ninth and last content area is the Industry Area. The Industry area includes guidance about a certain industry or a type of activity.

References:

https://asc.fasb.org/cs/BlobServer?blobkey=id&blobwhere=11758270