The Financial Accounting Standards Board voted Wednesday to approve the FASB Accounting Standards Codification as the single authoritative, nongovernmental source of information on GAAP, with an official launch date set for July 1.
The codification will be effective for interim and annual periods ending after Sept. 15, 2009, so preparers must begin to use the codification for periods that begin on or about July 1. It will supersede all existing accounting standard documents, and all other accounting literature not included in the codification will be considered non-authoritative.
While the codification does not change GAAP, it introduces a new structure organized in a more easily accessible online research system. The codification reorganizes the thousands of U.S. GAAP pronouncements into roughly 90 accounting topics and displays all topics using a consistent structure. It also includes relevant SEC guidance that follows the same topical structure in separate sections in the codification.
FASB has been testing the system since January 2008 during an extended verification period.
FASB expects that the new system will reduce the amount of time and effort required to research an accounting issue, mitigate the risk of noncompliance with standards through improved usability, provide accurate information with real-time updates as new standards are released, and assist FASB with the research efforts required during the standard-setting process.
When the codification goes live on July 1, 2009, it will vastly improve the ease of researching U.S. GAAP issues, said FASB Chairman Robert Herz in a statement.
To prepare for the change, FASB has provided tools, webcasts and training resources, including an online tutorial at http://asc.fasb.org and a Q&A document at http://www.fasb.org/cod_project/Cod_overview_12-08.pdf.
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