Accounting & Auditing | Legislative / Regulatory

Codification: Lots of optimism, a few ‘gray areas’

Files The countdown to Codification continues.

The Accounting Standards Codification -- the FASB's effort to reorganize thousands of U.S. GAAP pronouncements under about 90 accounting headings -- will be launched on July 1, and everyone is tingling with anticipation.

OK, not everyone. According to Rick Telberg, a recent Grant Thornton study found that only 46 percent of CFOs and senior comptrollers even know about the project.

Considering it's "probably the biggest change in the structure and organization of GAAP 'in over 50 years,'" they'd better start paying attention soon, Schneider Downs Audit Manager Mara Bruce told Telberg. “It’s time to start to learn to navigate through the codification, so you aren’t left in the dark.”

CFO's Alix Stuart says there are some "gray areas" of uncertainty with the Codification. CFOs, for instance, will have to "change financial statements to eliminate the old rule references and either replace them with topic and subtopic numbers," Stuart writes. They'll also have to adjust their internal controls to take the Codification into account.

Still, Stuart reports that most executives who do know about the project are generally positive in their assessments. "It's a great step, and will absolutely decrease the amount of time my staff spends on accounting research," Steffan Tomlinson, CFO of Aruba Networks, told Stuart.

According to the FASB, the Codification will be available in two views:

  • A basic view, free to all, that provides access to all authoritative non-governmental U.S. GAAP, including relevant SEC content, organized by topic; a utility to identify the location of original standards; and basic print functionality.
  • A more robust professional view designed for accounting and reporting professionals, analysts and investors that includes cross-referencing, search functionality, archiving features, the ability to send comments to colleagues via e-mail, and more. A single annual subscription to the professional view is $850; discounts are available for multiple-use agreements.
  • Academic access. According to the FASB, "the Financial Accounting Foundation, through a special program with the American Accounting Association, will provide free access to the professional view for faculty and students of accounting programs at post-secondary educational institutions." Get details here.

Registration for the Codification will begin on July 1 at the official Codification Web site.

There are plenty of resources available to guide you through the Codification maze. Among them:


Bill Sheridan