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.
