The US Financial Accounting Standards Board’s (FASB) codified GAAP will become the sole authoritative source of non-governmental US GAAP for reporting periods beginning on or after 1 July.
The FASB officially approved the Accounting Standards Codification at a meeting this month. The codification reorganises the thousands of GAAP pronouncements into about 90 accounting topics and displays all topics using a consistent structure.
The new system is designed to reduce the time and effort required to solve accounting research issues and mitigate the risk of noncompliance with standards through simpler literature.
Real-time updates will be made as new standards are released.
Grant Thornton US chief executive Ed Nusbaum told The Accountant the codification is an excellent project that Grant Thornton has been very supportive of.
“It is not going to change accounting, it is not going to change the financial statements that any company issues, it is simply going to facilitate the process to make it easier for accountants that are within corporations as well as accountants that are within accounting firms, or even at universities studying accounting, to learn about US accounting standards and understand them,” Nusbaum said.
The codification will produce better results and there will be slight improvements in the quality of reporting, but this will be in the details, Nusbaum added.
He suggested it will not significantly impact any costs or affect results that anyone will notice on the surface.