Just as I started to memorize those Standard numbers, the FASB changes the playing field!!
By Linda Cavanaugh, CPA - The FASB has decided that the current GAAP hierarchy is just too complicated with all the Standards, EITFs, DIG issues, AICPA SOPs, SEC guidance and other stuff. They have been working on a "codification project" for years and have finally introduced it to the public.
The FASB states that the "new stucture and system will reduce the amount of time and effort required to solve an accounting research issue and improve usability of the literature thereby mitigating the risk of non-compliance with the standards."
The new codification will replace the current heirarchy and will become the only source of GAAP. If it is not part of the codification then it is not considered authoritative.
I agree that it is difficult to make sure you have checked all of the different sources when researching an issue, but I am just starting to be able to quote FASB. Such as "according to FAS 123R, you can't reverse the expense from a market condition." Now I am going to have to learn to quote a whole new system, such as, "according to Section 405, sub section xxx, paragraph xxx". I am not a happy camper, I do not like change.
For those of you who are adventurous go out to the website at http://asc.fasb.org/home and give it a try. You have to register, but the system is free for a year. There is no mention of how the system will work after the trial year, but I called my accounting research provider and he said that they would be offering the new product.
The FASB asks that you provide feedback on the system, especially the accuracy and completeness of the information. You are not suppose to rely on the information until it has become approved after the one year trial period.
So go take a look and start learning the new system. And try to remember that learning keeps our brains young.
Linda is a CPA living in Southwestern Ohio, working as a research accountant for an investor-owned publicly traded utility company. She specializes in implementing new FASB and SEC requirements and FAS 133 derivative issues. In her role at the utility she has encountered many issues and written many memos, so send in your implementation and derivative issues and Linda will help figure out an answer.