FASB Codification & IFRS: Chapter 2 - Introduction and Search Strategies (Video Notes)

Vocabulary flashcards covering key terms and concepts from the lecture notes on the FASB Codification and search strategies.

Codification

The sole source of authoritative GAAP for nongovernmental entities, effective since 2009; its purpose is to simplify research.

Authoritative guidance

Guidance that must be followed in order to receive an unmodified audit opinion (per the AICPA Code ET 1.320.001).

Nongovernmental entities

Public and nonpublic companies governed by the Codification.

Source Material (2009 Codification)

All then-current guidance from multiple sources (FASB, CAP/APB, EITF, DIG, AICPA, etc.) incorporated into the Codification; original standards were superseded.

Accounting Standards Updates (ASUs)

FASB updates that modify the Codification; they are not authoritative on their own but implement changes within the Codification.

SEC content in Codification

SEC guidance included in the Codification for public companies (e.g., SX, FRRs/ASRs, IRs, SABs, EITF Topic D, SEC observer comments); identified with an 'S' prefix; not all SEC guidance is included.

Areas (Codification)

Nine broad structural divisions in the Codification that organize guidance; used to locate Topics.

Topics

Groupings within Areas that cover related guidance (e.g., Leases, Inventory, Revenue); contain Subtopics.

Subtopics

Subdivision within a Topic (e.g., ASC 842 Lessee = Subtopic 20).

Sections

Guidance within a Subtopic, organized into sections (e.g., Overview 05, Recognition 25, Initial Measurement 30).

Paragraphs

The actual guidance within a Section; may be organized into Subsections and issue headers.

Overall subtopic

The pervasive '10' subtopic within a Topic; read it in addition to other applicable subtopics.

Master Glossary

Central glossary of terms used in the Codification with links to related guidance; terms can have multiple definitions depending on context.

Go To feature

Navigation tool to jump directly to a specific ASC reference number.

Browse searches

Primary recommended search method; helps build context by exploring Areas and Topics rather than jumping directly to text.

Pending content

ASUs added as pending content; includes transition guidance and effective dates; apply when the date has passed or note for future periods.

Transition dates

Timing language in guidance (e.g., 'for fiscal years ending after December 15, 20x1') that indicates when guidance becomes effective.

Organization by Areas and Topics (structure)

Codification organization: Areas > Topics > Subtopics > Sections > Subsections > Paragraphs; e.g., Leases (Topic 842) → Lessee (20) → Initial Measurement (30) → Paragraph 1.

Nine broad Areas (examples)

General Principles, Presentation, Broad Transactions, Industry (four areas typically highlighted in examples; other areas exist within the Codification).

SEC guidance sections (S sections)

SEC guidance within Subsections identified by an 'S' prefix; part of the Codification but not all SEC content is included.

Required reading areas

Areas of guidance that should be skimmed/read for potential relevance; include checking SEC guidance for public companies and ensuring transactions are within scope.

Private Company Council (PCC)

FASB advisory body that creates optional private-company accounting alternatives in the Codification; applicability is optional and PCC will continue advising on private-company issues.