FASB Accounting Standards CodificationTM to Officially Launch on July 1, 2009
6/19/2009
Earlier this month, the Financial Accounting Standards Board (FASB) approved the use of the FASB Accounting Standards Codification as the single source of authoritative nongovernmental U.S. Generally Accepted Accounting Principles (GAAP), effective July 1, 2009. The Codification combines the current GAAP hierarchy which includes four levels of authoritative accounting literature distributed among a number of different sources. According to FASB, all existing accounting standard documents are superseded by the Codification and all other accounting literature not included in the Codification will be considered nonauthoritative.
What this means is that the Codification will be effective for interim and annual periods ending after September 15, 2009. Preparers must begin using the Codification for periods that begin on or about July 1, 2009.
The Codification, which has been available on a trial basis since January 2008, is an online research system featuring thousands of pages of GAAP pronouncements reorganized into approximately 90 accounting topics. Dubbed “easily accessible and user-friendly,” the Codification features a consistent structure throughout and also includes relevant Securities and Exchange Commission (SEC) guidance in a separate section. In making the use of the Codification mandatory, FASB’s goal is to reduce the amount of time and effort required to research an accounting issue, mitigate the risk for noncompliance with standards, and provide accurate information with real-time updates as new standards are released.
In order to assist with the change, FASB has a number of tools and training resources available on their website.
For assistance or further information about these FASB pronouncements, please contact Kenneth Nielsen Goldmann, J.H. Cohn Partner and SEC and Capital Markets Practice Director, by email or at (973) 618-6232.