Examples Of Fasb Codification

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The Financial Accounting Standards Board (FASB) codification for notes to the financial statements focuses on the details and usefulness of disclosures presented by an organization to investors and the public. Accounting policies should comply with (Governmental Accepted Accounting Principles (GAAP) standards to ensure fair representation of the organizations financial statements. Accounting policies adopted by an organization can significantly affect many areas of the financial statements. FASB codification has classified all disclosure notes with the code 50. While there is a section dedicated to the notes to financial statements (FASB, 235-10-50), each topic within the codification can include the disclosure requirement. During my…show more content…
Note sections often include how the organization recognizes revenues and expense, allocation of assets, cash and equity presentation just to name a few. The FASB includes some examples of accounting policies disclosures including; inventory and depreciation method, basis of consolidation, recognition of profit on long-term construction-type contracts and recognition of revenue from franchising and leasing operations (FASB, 2009). When creating disclosures, it is important to keep in mind the FASB code and GAAP standards require a disclosure note for any accounting method outside of the industry standards. If using the standard application of GAAP requirements, and principles accepted in the industry the organization operates, a note disclosure is not required. If an item is presented outside of normal, then a note will be required describing the method and why it was used instead of the…show more content…
Detail information on note requirements and examples for each section of the balance sheet and income statement were available. To be able to accurately compare and contrast to the FASB codification, I will focus on analyzing requirements around accounting policies disclosures The GAAP practice manual section 27.1 presents accounting authorities pronouncements. It references and offers a link to the FASB codification 235-10-50 which I found helpful to review and note any variances. The disclosed matters section presents the same information as the FASB codification but in wording that is easily understandable. In addition to the FASB tieback, the section includes the SEC required disclosures of what the department considers critical accounting policies (Thomson Reuters, 2010). The commission as defines critical accounting policies policies, essentially, as those that (1) are the most important to the portrayal of financial condition and results of operations, and (2) require management's most difficult, subjective, or complex judgment, particularly because of the need to make estimates concerning the impact of inherently uncertain matters (Thomson Reuters 2010)

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