FASB Accounting Standards Codification
Michael Piessens, CPA, CMA, CFMRob Busch, CPA
MFA – Moody, Famiglietti & Andronico, LLPCopyright 2009. Moody, Famiglietti & Andronico, LLP. All Rights Reserved.
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Seminar Logistics
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CPE credit
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Our Presenters
Michael Piessens, CPA, CMA, CFM
Manager of Financial Reporting
MFA - Moody, Famiglietti & Andronico
Robert Busch, CPA
Senior Audit Manager
MFA - Moody, Famiglietti & Andronico
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Agenda
Overview
Website Layout & Functionality
Available Tools
Next Steps / Implications
Resources
Q&A
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Overview — What It Is
An online repository and search system that integrates and categorizes existingU.S. GAAP for non-governmental entities
Includes all guidance by standard setters, (FASB, AICPA, EITF, etc.) within levels A through D of U.S. GAAP hierarchy
Also includes relevant content from SEC / SEC staff
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Overview — What’s Included
FASB Statements, Interpretations, Technical Bulletins, Staff Positions, Staff Implementation Guides, FAS 138 ExamplesEITF Abstracts and Topic DDIG IssuesAPB OpinionsARB’s
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Overview — What’s Included
Accounting Interpretations
AICPA SoP’s, Audit & Accounting Guides, Practice Bulletins, Technical Inquiry Service (Software Revenue Recognition)
Reg. S-X
Financial Reporting / Accounting Series Releases
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Overview — What’s Included
Interpretive Releases
SEC Staff Guidance in SAB’s, EITF Topic D, SEC Staff Observer Comments (at EITF meetings)
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Overview — Replaces FAS 162
Hierarchy of GAAP – replacement of FAS 162
Establishes 2 GAAP levels: authoritative and non-authoritative
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Overview — Replaces FAS 162
Codification will become the single source of authoritative guidance for U.S. accounting and reporting standards other than guidance by SEC
Effective July 1, 2009 for interim and annual periods ending after September 15, 2009 (i.e., for periods that begin on or after July 1, 2009)
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Overview — Benefits
One stop shopping for all authoritative guidanceExisting guidance can be updated and new guidance incorporated by topical area instead of by standard typeCodification users will be able to find a topic and ensure they are accessing all information relevant to that topic
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Overview — Structure
Organized into 5 areas covering ~90 topicsArea Topic
General Principles & Objectives GAAP
Presentation B/S, I/S, etc.
F/S Accounts (Assets, Liab., Equity, Rev., Exp.)
Receivables, Rev. Rec., Inventory, Debt, etc.
Broad Transactions Consol., Leases, etc.
Industries Airlines, Software, Entertainment, etc.
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Overview — Structure
Topics include one or more Sub-topics– (e.g., Under the “Leasing” Topic are the “Overall”,
“Operating Leases” and “Capital Leases” Sub-topics
Sub-topics include one or more Sections– (e.g., “Scope”, “Recognition”, “Measurement”,
“Disclosure”, etc.)
Sections can include one or more Sub-sections– (e.g., “Lessor vs. Lessee Accounting”)
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Overview — Structure
Structure of Referencing
ASC XXX-YY-ZZ-PP
XXX = TopicYY = Subtopic, ZZ = Section
(Note: “S” preceding the Section no. re: SEC content)
PP = Paragraph
Note: Referencing structure doesn’t include “Sub-sections”. It references “Paragraphs” within “Sections”.
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Overview — Structure
Structure of Referencing
Sample References for Leases :
– ASC 840 = Leases (Topic)
– ASC 840 - 10 = Overall (Sub-topic)
– ASC 840 - 10 - 15 = Scope (Section)
– ASC 840 - 10 - 50 = Disclosure (Section)
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Overview — Referencing
Referencing within Financial Statements– Once an entity adopts Codification, any
references within its financial statements to specific guidance should be to that for the Codification, not the original pronouncements
– Financial statements for periods beginning on or after July 1, 2009 should reflect the new referencing
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Overview — Disclosure LanguageAccounting for Long-Term Contracts — Example of Before vs. After
– Under Current Literature (pre-July 1, 2009) - Reference: AICPA SOP 81-1…the Company currently accounts for revenue recognition of its long-term contracts under the percentage-of-completion method in accordance with provisions of AICPA Statement of Position No. 81-1, Accounting for Performance of Construction-Type and Certain Production-Type Contracts…
– Under FASB Codification (as of July 1, 2009) - Reference: FASB ASC 605-35-25… the Company currently accounts for revenue recognition of its long-term contracts under the percentage-of-completion method in accordance with provisions of FASB ASC 605-35-25 (Prior authoritative literature: SOP 81-1, Accounting for Performance of Construction-Type and Certain Production-Type Contracts) …
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Overview — Disclosure Language
Overview – Disclosure Language Before vs. After (Example)
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Website Layout & Functionality
Home Page
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Website Layout & Functionality
Navigation - Area, Topic, Sub-topic, etc.
AREA
TOPIC SUB-TOPIC
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Website Layout & Functionality
“Join All Sections” Feature– Use to join all Sections within a Sub-topic. [i.e.,
Sections 00, 05, 15…S99 within Sub-topic 10 (Overall) of Topic 320 (Investments—Debt and Equity Securities)]
– Useful tool for transition
“Combine Sections” Feature– Similar to “Join” feature
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Website Layout & Functionality
“Join Sections” Feature– Brings together Sections from multiple Sub-topics
into one document– Example — the “Disclosure” Sections for all Sub-
topics within the “Revenue Recognition” Topic
“Cross Reference” Feature– Enter either a historical GAAP reference or a
Codification reference– Receive a report showing the historical GAAP
references and a link to the current Codification guidance
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Website Layout & Functionality“Printer Friendly with Sources” Feature– Enables user to print current Codification content
with notations of the sources from the historical GAAP literature
– Can provide a very easy and user-friendly reference tool for transition
“Master Glossary”– Provides listing of all defined terms in the
Codification– May include multiple definitions for the same term
(i.e., public entity)
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Website Layout & Functionality
“Future Codification Updates”– Published as Codification Update Instructions
(“CUI’s”)– Will contain a new standard, along with instructions
regarding how the new standard will be incorporated into the Codification
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Available Tools
FASB website (http://fasb.org)– Basic view (no charge, limited functionality,
content only)
– Enhanced view (requires subscription, full functionality)
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Next Steps / Implications
Implementation will be challenging– New structure will take time to learn
– Old standards may be split over several new topics
Review your financial statements to determine what will need to change and how
Visit FASB Codification website and become familiar with its structure and functionality
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Next Steps / Implications
Update policies, memo’s, bases for conclusions, etc.
Determine which tool you will use to access the Codification
Discuss questions and concerns with MFA
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Resources
FASB– Notice to Constituents
(http://asc.fasb.org/home)
– Online Tutorial(http://asc.fasb.org/home)
– Codification Q&A(http://fasb.org/cod_project/Cod_overview_12-08.pdf)
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Resources
AICPA– FASB Codification Developments – 2008:
Strengthening Financial Management and Reporting(http://www.cpa2biz.com/AST/Main/CPA2BIZ_Primary/Accounting/FinancialReporting/PRDOVR~PC-029209/PC-029209.jsp)
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Questions
Michael [email protected]
Robert [email protected]
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MFA – Moody, Famiglietti & Andronico
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