FASB Codification Resources

The one stop for everything about the Codification project.

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  • Robert E Jensen

    "Using the Codification to Research a Complex Accounting Issue: The Case of Goodwill Impairment at Jackson Enterprises," by Casey J. McNellis, Ronald F. Premuroso, and Robert E. Houmes , Issues in Accounting Education, Volume 30, Issue 1 (February 2015) ---
    http://aaajournals.org/doi/full/10.2308/iace-50949

    This case is designed to help students develop research skills using the Financial Accounting Standards Board's (FASB) Accounting Standards Codification (Codification or ASC). The case also helps develop students' abilities to analyze and recommend alternatives for a complex accounting issue, goodwill impairment, which is very relevant in today's business world. This case can be used in an undergraduate or graduate accounting class, either in groups of students or as an individual student project.

    . . .

    Shortly after the case was tested in the graduate course, it was administered to undergraduate students enrolled in an Intermediate I course (n = 50). These students had learned the basics of the two-step impairment test in the week preceding the assignment of the case. As indicated in Table 1, the undergraduate class averaged 57.33 percent on the six-question post-case assessment. These students did not receive the six-question assessment prior to reading the case. This was done partially out of necessity because of the time constraints imposed by the intermediate-level curriculum. The Intermediate I course contains a fixed amount of material that must be learned by students prior to their enrollment in the Intermediate II course.7 Given the demands of the curriculum, the instructor only had a portion (approximately 60 minutes) of one class period in which to devote to the case. This class period was used to discuss the case and to administer the case-related survey items (see paragraph below) after the students read the case and answered the case requirements.8 However, given the pre-test scores that we observed in the graduate class, we also felt this course of action was appropriate, as it was deemed unlikely that the undergraduate students' pre-case knowledge of the in-depth issues would be greater than the graduate students, who had already taken the Intermediate I course. As such, we believe the undergraduate post-case assessment average provides additional evidence of the efficacy of this case.

    After the case study was completed and the results and the answers to the case study were discussed and reviewed with the students in each respective class, the instructors had each student complete a five-question survey found in Appendix A. The results of the survey are summarized in Table 2. In general, the mean responses to the five survey questions exceeded 4 on a scale of 1 (disagree) to 5 (totally agree) for the students performing this case study.

    Bob Jensen's threads on impairment ---
    http://www.trinity.edu/rjensen/Theory02.htm#Impairment

     

  • Robert E Jensen

    ASC = Accounting Standard Codification of the FASB

    January 8, 2013 message from Zane Swanson

    Another faculty person created a video (link follows)
    http://www.screencast.com/t/K8gruSHTv

    which introduces the ASC.  This video has potential value at the beginning of the semester to acquaint students with the ASC.  I am thinking about posting the clip to AAA commons.  But, where should it be posted and does this type of thing get posted in multiple interest group areas?

     Any thoughts / suggestions?

    Zane Swanson
    www.askaref.com a handheld device source of ASC information

    Jensen Comment
    A disappointment for colleges and students is that access to the Codification database is not free. The FASB does offer deeply discounted prices to colleges but not to individual teachers or students.

    There are other access routes that are not free such as the PwC Comperio ---
    http://www.pwc.com/gx/en/comperio/index.jhtml

    Hi Zane,
     
    This is a great video helper for learning how to use the FASB.s Codification database.
     
    An enormous disappointment to me is how the Codification omits many, many illustrations in the pre-codification pronouncements that are still available electronically as PDF files. In particular, the best way to learn a very complicated standard like FAS 133 is to study the illustrations in the original FAS 133, FAS 138, etc.
     
    The FASB paid a fortune for experts to develop the illustrations in the pre-codification  pronouncements. It's sad that those investments are wasted in the Codification database.
     
    What is even worse is that accounting teachers are forgetting to go to the pre-codification pronouncements for wonderful illustrations to use in class and illustrations for CPA exam preparation ---
    http://www.fasb.org/jsp/FASB/Page/PreCodSectionPage&cid=1218220137031
     
    Sadly the FASB no longer seems to invest as much in illustrations for new pronouncements in the Codification database.

    Bob Jensen

     

    Examples of great FAS 133 pre-codification illustrations are as follows:

                  
    
    [ ]133ex01a.xls 12-Jun-2008 03:50 345K [ ]133ex02.doc 17-Feb-2004 06:00 2.1M [ ]133ex02a.xls 12-Jun-2008 03:48 279K [ ]133ex03a.xls 04-Apr-2001 06:45 92K [ ]133ex04a.xls 12-Jun-2008 03:50 345K [TXT]133ex05.htm 04-Apr-2001 06:45 371K [ ]133ex05a.xls 12-Jun-2008 03:49 1.5M [TXT]133ex05aSupplement.htm 26-Mar-2005 13:59 57K [ ]133ex05aSupplement.xls 26-Mar-2005 13:50 32K [TXT]133ex05d.htm 26-Mar-2005 13:59 56K [ ]133ex06a.xls 29-Sep-2001 11:43 123K [ ]133ex07a.xls 08-Mar-2004 16:26 1.2M [ ]133ex08a.xls 29-Sep-2001 11:43 216K [ ]133ex09a.xls 12-Jun-2008 03:49 99K [ ]133ex10.doc 17-Feb-2004 16:37 80K [ ]133ex10a.xls[TXT]133summ.htm 13-Feb-2004 10:50 121K [TXT]138EXAMPLES.htm 30-Apr-2004 08:39 355K [TXT]138bench.htm 07-Dec-2007 05:37 139K [ ]138ex01a.xls 09-Mar-2001 13:20 1.7M [TXT]138exh01.htm 09-Mar-2001 13:20 31K [TXT]138exh02.htm 09-Mar-2001 13:20 65K [TXT]138exh03.htm 09-Mar-2001 13:20 42K [TXT]138exh04.htm 09-Mar-2001 13:20 108K [TXT]138exh04a.htm 09-Mar-2001 13:20 8.2K [ ]138intro.doc 09-Mar-2001 13:20 95K [TXT]138intro.htm 09-M

    Others --- http://www.cs.trinity.edu/~rjensen/

    Jensen Comment
    A disappointment for colleges and students is that access to the Codification database is not free. The FASB does offer deeply discounted prices to colleges but not to individual teachers or students.

    There are other access routes that are not free such as the PwC Comperio ---
    http://www.pwc.com/gx/en/comperio/index.jhtml

  • Robert E Jensen

    Resistance is Futile

     

    Teaching Case on How IFRS Resistance Was Futile All Along:  A Revenue Bonanza for CPA Firms, the AICPA, and Other Training Providers

    From The Wall Street Journal Accounting Weekly Review in February 24, 2012

    U.S. Nears Accounting Shift
    by: Michael Rapoport
    Feb 21, 2012
    Click here to view the full article on WSJ.com
     

    TOPICS: FASB, Financial Accounting Standards Board, Financial Reporting, International Accounting Standards, International Accounting Standards Board, SEC, Securities and Exchange Commission

    SUMMARY: James Kroeker of the SEC spoke at an IFRS advisory panel in London on Monday, February 20, 2012. He discussed the SEC's current thinking on adoption of IFRS and the role of the FASB in that system. According to the article, his comments were made "in terms that hinted that he and his staff were gravitating toward a middle-ground 'endorsement' proposal, under which IFRS would be incorporated into U.S. rules and U.S. rule makers would retain the authority to evaluate future global rules for U.S. use."

    CLASSROOM APPLICATION: The article is useful to bring to students' attention the current status of a U.S. shift to global financial reporting standards (IFRS) established by the IASB with review and endorsement by the FASB.

    QUESTIONS: 
    1. (Advanced) Who establishes International Financial Reporting Standards (IFRS)?

    2. (Advanced) Summarize the status of use of IFRS from comments in this article, augmented by information on the web located at http://www.ifrs.org/Use+around+the+world/Use+around+the+world.htm.

    3. (Introductory) According to the article, why are "international authorities...pushing the [U.S. Securities and Exchange Commission] to move U.S. companies to use the global rules"? Why do accounting firms and large multinational corporations also support this view?

    4. (Advanced) What is principles-based standard setting? How is this different from the approach generally taken under U.S. Generally Accepted Accounting Principles (U.S. GAAP)?

    5. (Introductory) According to the article, as the U.S. moves to using IFRS, what will become the role of the Financial Accounting Standards Board (FASB)?
     

    SMALL GROUP ASSIGNMENT: 
    Access the SEC web site at www.sec.gov. Search for the term "condorsement" through the Search field in the upper right hand. Locate the speech by Deputy Chief Accountant Paul A. Beswick on December 6, 2010, to the AICPA National Conference on Current SEC and PCAOB Developments. Answer the following two questions: What does this coined term "condorsement" mean? What role does this approach imply for the FASB?

    Reviewed By: Judy Beckman, University of Rhode Island

    "U.S. Nears Accounting Shift," by Michael Rapoport, The Wall Street Journal, February 21, 2012 ---
    http://online.wsj.com/article/SB10001424052970204131004577235480168228286.html?mod=djem_jiewr_AC_domainid

    Regulators are edging closer to switching U.S. companies to global accounting rules, as the Securities and Exchange Commission's top accountant suggested Monday he was moving toward recommending a long-discussed compromise approach.

    International authorities are pushing the SEC to move U.S. companies to use the global rules, known as International Financial Reporting Standards, to unify companies world-wide under the same accounting system. American corporations are watching intently for a recommendation from the SEC's staff about whether the commission should do so. Big accounting firms and multinational companies say a move would simplify their accounting and make it easier for them to raise capital around the world, while skeptics say it would be too costly and burdensome.

    Most companies world-wide now use IFRS, but the U.S. still uses its own set of rules, known as generally accepted accounting principles. IFRS allows companies more flexibility and judgment than GAAP. The global system is centered on applying guiding principles of accounting rather than following GAAP's set of detailed rules.

    The SEC's staff hasn't made a recommendation yet. But on Monday, SEC Chief Accountant James Kroeker discussed the matter in terms that hinted that he and his staff were gravitating toward a middle-ground "endorsement" proposal, under which IFRS would be incorporated into U.S. rules and U.S. rule makers would retain the authority to evaluate future global rules for U.S. use.

    Speaking to an IFRS advisory panel in London, Mr. Kroeker said that the rules to be used globally "would be the standards of the IASB"—the International Accounting Standards Board, which created IFRS—and that the Financial Accounting Standards Board, the U.S. rule maker, would play "an endorsing role."

    Joel Osnoss, Deloitte Touche Tohmatsu Ltd.'s global leader for IFRS, said Mr. Kroeker's remarks "clearly confirm" that he and his staff are heading toward a recommendation that the SEC use IFRS for American companies.

    Continued in article

    Jensen Comment
    ASC = Always (was) Codification Stupidity
    Kiss the FASB's Codification Database goodbye. It was probably a waste of millions of dollars all along.

    Bob Jensen's threads on accounting standard setting controversies ---
    http://www.trinity.edu/rjensen/Theory01.htm#MethodsForSetting

    References for Comparisons of IFRS versus U.S. GAAP

    US GAAP versus IFRS: The basics
    2011 Edition, 56 Pages
    Free from Ernst & Young
    http://www.ey.com/Publication/vwLUAssetsAL/IFRSBasics_BB2280_December2011/$FILE/IFRSBasics_BB2280_December2011.pdf

    IFRS and US GAAP: Similarities and Differences
    2011 Edition, 238 Pages
    From PwC
    http://www.pwc.com/us/en/issues/ifrs-reporting/publications/ifrs-and-us-gaap-similarities-and-differences.jhtml
    Note the Download button!

    From Deloitte
    Comparisons of IFRS With Local GAAPS
    http://www.iasplus.com/dttpubs/pubs.htm#compare1109
    IFRS and US GAAP
    July 2008 Edition, 76 Pages
    http://www.iasplus.com/dttpubs/0809ifrsusgaap.pdf

    Jensen Comment
    At the moment I prefer the PwC reference
    My favorite comparison topics (Derivatives and Hedging) begin on Page 158 in the PwC reference
    The booklet does a good job listing differences but, in my opinion, overly downplays the importance of these differences. It may well be that IFRS is more restrictive in some areas and less restrictive in other areas to a fault. This is one topical area where IFRS becomes much too subjective such that comparisons of derivatives and hedging activities under IFRS can defeat the main purpose of "standards." The main purpose of an "accounting standard" is to lead to greater comparability of inter-company financial statements. Boo on IFRS in this topical area, especially when it comes to testing hedge effectiveness!

    One key quotation is on Page 165

    IFRS does not specifically discuss the methodology of applying a critical-terms match in the level of detail included within U.S. GAAP.
    Then it goes yatta, yatta, yatta.

    Jensen Comment
    This is so typical of when IFRS fails to present the "same level of detail" and more importantly fails to provide "implementation guidance" comparable with the FASB's DIG implementation topics and illustrations.

    I have a huge beef with the lack of illustrations in IFRS versus the many illustrations in U.S. GAAP.

    I have a huge beef with the lack of illustrations in IFRS versus the many illustrations in U.S. GAAP.

    I have a huge beef with the lack of illustrations in IFRS versus the many illustrations in U.S. GAAP.

  • Robert E Jensen

     

    "Could Codification Weaken Internal Controls? Maybe. And here's what you can do to mitigate the effect on your accounting policies, disclosures, and error detection," by Bruce Pounder, CFO.com April 16, 2010 ---
    http://www.cfo.com/article.cfm/14491629/?f=rsspage

    April 17, 2010 reply from Jagdish Gangolly [gangolly@GMAIL.COM]

    Bob,

    I read the article carefully.

    If the author really means to say that codification has added to the costs of financial reporting because of the five effects of codification, I completely agree. However, the author's arguments that codification weakens internal controls are transparently bogus.

    It is true that all references to GAAP requires revision because of codification, and that it requires additional work and entails additional cost. But to say that the impact of codification on internal controls could be to weaken them is like saying that I could make more mistakes and pay more penalties on this years tax return because the tax law changed. Of course you will pay penalties if you don't follow the tax law changes, but you don't have to be careless enough not to know what the changes are.

    Jagdish --
    Jagdish S. Gangolly Department of Informatics College of Computing & Information State University of New York at Albany Harriman Campus, Building 7A, Suite 220 Albany, NY 12222 Phone: 518-956-8251, Fax: 518-956-8247

    April 18, 2010 reply from Bob Jensen

    I agree Jagdish and still think the money and time given FASB Codification is a waste if the SEC does not shoot IFRS convergence down. And the chances of the SEC doing this are almost zero in my opinion. Soon the FASB’s Codification database will be only an expensive accounting history database --- http://www.trinity.edu/rjensen/theory01.htm#MethodsForSetting 
    Codification is a good idea only if we do not abandon FASB standards.

    Another more interesting question will be whether the IASB standards and interpretations can be eliminated as hard copy (and the present electronic reproductions of hard copy) in the same manner that the FASB eliminated hard copy/PDF files with the Codification database. In my opinion, it will be much more difficult to create a codification database for IFRS due to the language and other barriers, including a much more complicated costing and billing problem. The FASB worked out a usage and billing scheme for members of the American Accounting Association. It is much more difficult, however, to reach IFRS educators in remote parts of the world.

    Codification (complete with over a hundred language translations) could be a wonderful thing for international standards But the cost of complete codification is truly immense.

    It will be many years before the IASB and its many constituencies can achieve the efficiencies that are envisioned for the FASB Codification database (that I personally consider a pain in the tail at present). One of my complaints as an educator is the way the Codification database left out many  wonderful teaching illustrations contained in the hard copy versions and revisions of standards and interpretations. FAS 133, FAS 138, and other amendments of FAS 133 contain many examples of wonderful learning illustration losses in the Codification database.

    Bob Jensen

    Bob Jensen's threads on FASB Codification are at
    http://www.trinity.edu/rjensen/theory01.htm#MethodsForSetting

  • Robert E Jensen

    October 18, 2009 reply from Bob Jensen

    First I want to point out that the FASB Codification database is now included in Comperio such that if your college gets access to Comperio, you may not need the AAA site license. Also the IASB library is included in Comperio such that no added purchases in international licenses is required. Of course Comperio a very comprehensive research library and costly accounting research library --- http://www.pwc.com/gx/en/comperio/index.jhtml

    Whether your company reports under US GAAP, IFRS, or both, Comperio's recently enhanced functionality offers you the ability to navigate both sets of financial reporting requirements using one accounting research tool. That tool gives you access to the same PwC interpretive guidance our own professional audit staff uses.

    If you can see this page, you can use Comperio—there’s no software to install: just go to the Comperio Web site and start researching! Content covers the FASB, EITF, AICPA, IASB, IFAC, PCAOB, SEC, FASAB and GASB, as well as the requirements of eight key countries from around the world. Plus, we've added the FASB’s new Accounting Standards Codification, which was launched in July 2009 as the single source of authoritative US accounting standards.

    If the course on “accounting research” is to be much like a law school course on “legal research,” it should focus on where to find answers. Denny suggested, among other things, teaching students how to use the FASB Codification database.

    As an extension, I recommend teaching students how to use PwC’s Comperio Virtual Library of Accounting Research --- http://www.pwc.com/gx/en/comperio/index.jhtml
    The biggest problem is the cost of a multi-user site license, although at Trinity University our program was so small that we could teach some of the basics with a single-user site license (which is not restricted to a given user, but does restrict the use to one user at a time).

    Such a course could also include some tax research if the tax courses are finding it cumbersome to teach both tax and tax research. Your college probably already has at least one tax research license such as CCH.

    Since it is so common in the profession to use search engines, perhaps some attention could be given to “how scholars conduct searches” ---
    http://www.trinity.edu/rjensen/Searchh.htm#Scholars
    Most definitely the above link should be studied by doctoral students. However, undergraduates might also learn some of the basics of scholarly search.

    Bob Jensen

  • Robert E Jensen

    October 18, 2009 reply from Bob Jensen

    First I want to point out that the FASB Codification database is now included in Comperio such that if your college gets access to Comperio, you may not need the AAA site license. Also the IASB library is included in Comperio such that no added purchases in international licenses is required. Of course Comperio a very comprehensive research library and costly accounting research library --- http://www.pwc.com/gx/en/comperio/index.jhtml

    Whether your company reports under US GAAP, IFRS, or both, Comperio's recently enhanced functionality offers you the ability to navigate both sets of financial reporting requirements using one accounting research tool. That tool gives you access to the same PwC interpretive guidance our own professional audit staff uses.

    If you can see this page, you can use Comperio—there’s no software to install: just go to the Comperio Web site and start researching! Content covers the FASB, EITF, AICPA, IASB, IFAC, PCAOB, SEC, FASAB and GASB, as well as the requirements of eight key countries from around the world. Plus, we've added the FASB’s new Accounting Standards Codification, which was launched in July 2009 as the single source of authoritative US accounting standards.

    If the course on “accounting research” is to be much like a law school course on “legal research,” it should focus on where to find answers. Denny suggested, among other things, teaching students how to use the FASB Codification database.

    As an extension, I recommend teaching students how to use PwC’s Comperio Virtual Library of Accounting Research --- http://www.pwc.com/gx/en/comperio/index.jhtml
    The biggest problem is the cost of a multi-user site license, although at Trinity University our program was so small that we could teach some of the basics with a single-user site license (which is not restricted to a given user, but does restrict the use to one user at a time).

    Such a course could also include some tax research if the tax courses are finding it cumbersome to teach both tax and tax research. Your college probably already has at least one tax research license such as CCH.

    Since it is so common in the profession to use search engines, perhaps some attention could be given to “how scholars conduct searches” ---
    http://www.trinity.edu/rjensen/Searchh.htm#Scholars
    Most definitely the above link should be studied by doctoral students. However, undergraduates might also learn some of the basics of scholarly search.

    Bob Jensen

  • Robert E Jensen

    The PwC Codification Link is at
    http://cfodirect.pwc.com/CFODirectWeb/Controller.jpf?ContentCode=AALN-7C2RZ2&ContentType=Conten

     

     

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    DataLine 2009-12 - REVISED.pdf
    Attached to: DataLine 2009-12: FASB Codification - Preparing for the Transition (Revised June 3, 2009*)
    PricewaterhouseCoopers - 03/26/2009
    2009–12 March 26, 2009 (Revised June 3, 2009*) National Professional Services Group 1 CFOdirect Network—http://www.cfodirect.pwc.com DataLine A look at current financial reporting issues PricewaterhouseCoopers FASB Codification Preparing for the Transition At a glance What's...
    From site section: News & insights PwC technical alerts DataLine

     

    DataLine 2008-04.pdf
    Attached to: DataLine 2008-04: FASB Codification of Authoritative US GAAP
    PricewaterhouseCoopers - 02/21/2008
    DATALINE 2008-04: FASB CODIFICATION OF AUTHORITATIVE US GAAP INTRODUCTION .1 Last month, the Financial Accounting Standards Board (FASB) officially began a one-year verification period for a significant portion of the FASB Accounting Standards CodificationTM (the "Codificati...
    From site section: News & insights PwC technical alerts DataLine

     

     

    Deloitte’s Codification helpers are linked at
    http://www.iasplus.com/usa/fasb/0906codification.pdf
  • Robert E Jensen

    FASB Accounting Standards Codification Quick Reference Guide

    FASB Accounting Standards Codification Quick Reference Guide

    Summary:
    PwC has developed a Quick Reference Guide to help you make the transition to the Codification.

    This user-friendly Guide includes:

    • The structure of the Codification, including examples of the citation format
    • How new authoritative guidance will be released and incorporated into the Codification
    • Where to locate other PwC information and resources on the Codification
    • Listings of the Codification's "Topics" and "Sections"
    • A list of over 30 frequently-referenced accounting standards and the corresponding Codification Topics where they now primarily reside.

     

    The PwC Codification Link is at
    http://cfodirect.pwc.com/CFODirectWeb/Controller.jpf?ContentCode=AALN-7C2RZ2&ContentType=Conten

    Published: 09/03/2009

     

    The PwC Codification Link is at
    http://cfodirect.pwc.com/CFODirectWeb/Controller.jpf?ContentCode=AALN-7C2RZ2&ContentType=Conten

     

    Source: PricewaterhouseCoopers
    Author name: PwC assurance services

    Jensen Comment
    The Codification database has some huge limitations because it contains only a subset of the FASB hard copy material that it ostensibly is replacing.

    • FASB hard copy contains many wonderful illustrations that are, in my viewpoint, ideal for learning about standards and their interpretations. In fact many of the illustrations make FASB standards much easier to learn than IFRS international standards that are illustration-lite. Sadly many of the best FASB hard copy illustrations were left out of the Codification database such that these illustrations cannot be located by search and cross referencing. For example, when teaching the highly complicated FAS 133, the most important teaching aids for my students were the illustrations in Appendix A and Appendix B of FAS 133. Most of those wonderful illustrations are not in the Codification database which, in turn, makes it much less useful to accounting and finance educators. Dumb! Dumb! Dumb!
       
    • FASB hard copy contains much implementation guidance for complicated questions raised by auditors and their clients, guidance that is not contained or even cross-referenced  in the Codification database. The huge example here is the massive amount of implementation guidance for FAS 133 rendered by the FASB's Derivative Implementation Guidance Group (DIGG) --- http://www.fasb.org/derivatives/
      The many DIGG documents are difficult to search and cross reference. Including them in the Codification database would be terrific --- no such luck. Dumb! Dumb! Dumb!
       
    • Financial accounting textbooks, lecture materials, handouts, problem assignments, and cases do not at the moment reference the Codification database sections and subsections. Since corporate annual reports, at least for the next five years, will now have Codification database referencing rather than hard copy referencing, textbook publishers and educators will have to revise all these materials. Textbook publishers are probably ecstatic since all used books will be obsolete. Educators are not so ecstatic about revising so much of their own teaching material Furthermore, the financial accounting textbooks used in the 2009-2010 academic year will be obsolete. Dumb! Dumb! Dumb!
       
    • As Pat Walters pointed out, the Codification database does not include the Conceptual Framework hard copy. This means that the Conceptual Framework cannot be searched and cross referenced in the Codification database. Dumb! Dumb! Dumb!
       
    • The auditing standards make thousands upon thousands of references to FASB hard copy references. These will have to be changed to Codification database references until the Codification database self destructs. Dumb! Dumb! Dumb!
       
    • Accounting firms their clients will have to change vast amounts of materials to incorporate new Codification database referencing. For example, PwC will have to spend millions of dollars overhauling its massive Comperio database and for what? All this time and effort will have been wasted when the Codification database self destructs in about five years. Dumb! Dumb! Dumb!
       
    • Accounting firms and their clients will have to spend a lot of time and money training employees on how to use the Codification database that will self destruct in about five years --- Dumb! Dumb! Dumb!
       
    • Accounting software and millions of relational databases of accounting data will have to be revised for Codification database referencing. And the revised software will be useful for less than four years of use.  Dumb! Dumb! Dumb!
       
    • NASBA will have to revise future CPA examinations for referencing to Codification database referencing. But when should these revisions take place since virtually none of the financial accounting textbooks will have such referencing for at least a year and maybe more? As far as the CPA examination, the classes graduating in 2010 and 2011 will not have had textbooks that incorporated the Codification references. It seems a little unfair to hit candidates with a different referencing system than was in their textbooks. Dumb! Dumb! Dumb!
       
    • This year early adopters of XBRL who tagged their financial statements with FASB hard copy references will be putting out obsolete XBRL tagging. All the U.S. standard XBRL tagging software and financial analysis software will have to be rewritten --- http://www.cfo.com/article.cfm/13932485/c_2984368/?f=archives
      And it will be written for less than four years of use.  Dumb! Dumb! Dumb!
       
    • I’ve been using the Codification database rather intensively on a FAS 133 project since it became available. I can’t tell you how disappointed I am in content of the database, the lousy illustrations, and the poor search engine. The IASB search engine is vastly superior. Dumb! Dumb! Dumb!
       

    • The FASB will allow free access to the Codification database. But the search and cross referencing software is only available for a single-user license costing $850 per year. What makes electronic databases useful are the utilities for search and cross referencing. Hence the FASB will be raking in millions of dollars for a database that self destructs in about five years. Smart? Smart? Smart?
      The only good news is that college accounting departments can obtain multiple-user licenses for faculty and students at a discounted $150 price. As an accounting educator should I say thanks, but I have a hard time saying thanks for something that is dumb, dumb, and dumb.

      I'm told that the Codification database was mostly paid for with government SOX grants. If it was bought and paid for by the government, why does the FASB need to rake in millions more for the Codification database search and cross referencing utilities? This is especially bothersome since the FASB itself will probably give way to the IASB in just a few years. When that happens the money and intellectual capital we put into the FASB Codification database all goes down the drain. Dumb! Dumb! Dumb!

    So what would've been smart for the FASB at this juncture?
    Since the FASB is taking it as a given that it will virtually be out of business in 2015 (actually it will become a downsized subsidiary of the IASB). The FASB should forget implementation (selling) the FASB Codification database and commence full bore into expanding it into an IASB Codification database. Then it will be ready to roll in 2015 when the IASB standards replace the FASB standards. FASB standards could be left codified as well such that users can easily compare what used to be required by the FASB with what is now (after 2015) required by the IASB.

    More importantly, the FASB should work 24/7 adding implementation guidelines and illustrations into an IASB Codification database to make up for the sad state of international standards in terms of implementation guidelines for complex U.S. financial contracting. Tons of illustrations should also be added to the illustration-lite international standards at the moment.

    But implementing the FASB Codification database for five years or less is dumb, dumb, and dumb!

    "I'm glad I'm not young anymore."

     Bob Jensen's threads on Codification --- http://www.trinity.edu/rjensen/theory01.htm#MethodsForSetting

     

  • Kathy L. Casper

    Marilynn, I see that Concordia Univeristy Texas has now enrolled in the AAA Academic Accounting Access program. You should soon receive access credentials through your university.

  • Marilynn M Leathart

    Yes, I am having trouble accessing the FASB Codification with the password sent to me.

  • Robert E Jensen

    SERIOUS Doubts Over Proposed Changes to FAS 133 and IAS 39

    The FASB proposes dubious changes in FAS 133 on Accounting for Derivative Financial Instruments and Hedging Activities while the IASB is studying similar changes in IAS 39. With the SEC currently sitting on the fence in deciding if and when to replace FASB standards with IASB standards, I fully predict that IAS 39 will pretty much follow the revise FAS 133 as it did when IAS 39 was initially adopted, although IAS 39 will continue to have wider coverage of financial instruments in general whereas FAS 133 will narrowly focus on derivative financial instruments and hedge accounting.

    When the FASB initially signaled possible revisions for changing hedge accounting rules in FAS 133, a wave of protests from industry hit the fan. The article below is the response of Ira Kawaller who serves on the FASB's Derivatives Implementation Group (DIG) and who is one of the leading consultants on FAS 133 and hedging in general which is his where he has historic roots as a PhD in economics --- http://www.kawaller.com/about.shtml
    Ira has written nearly 100 trade articles on FAS 133. I don't think he consults on IAS 39. Ira's home page is at
    http://www.kawaller.com/about.shtml
    Ira also maintains a small hedge fund where he walks the talk about interest rate hedging. However, I'm no expert on hedge funds and will not comment on any particular hedge fund.

    I might note in passing for enthusiasts of the new FASB Codification Database for all FASB standards that FAS 133 coverage in the Codification database is relatively sparse. Professionals and students in hedge accounting most likely will have to connect back to original (non-codified) FASB literature. For example, none of the wonderful illustrations in Appendices A and B of FAS 133 are codified. And the extremely helpful, albeit complicated, pronouncements of the FASB's Derivatives Implementation Group (DIG) are excluded from the Codification database --- http://www.fasb.org/derivatives/
    Most of the DIG pronouncements are included in context at
    http://www.trinity.edu/rjensen/acct5341/speakers/133glosf.htm
    I will never have a lot of respect for the Codification database until it includes much, much more on FAS 133.

    Below is a publication in which Dr. Kawaller presents serious doubts regarding revisions to FAS 133 that the FASB is now considering (and the IASB is now considering for IAS 39).

    The problem is even more severe for entities with fixed-rate exposures. In this case, there’s a clear disconnect between what swaps are designed to do versus what the FASB requires for hedge accounting.
    "Paved With Good Intentions:  The Road to Better Accounting for Hedges," The CPA Journal, August 2009 ---
    http://www.kawaller.com/pdf/CPA_Paved_w_Good_Intent_Aug_2009.pdf

    With 10 years of experience under the current regime of accounting for derivative contracts and hedging transactions, the FASB has determined that it’s time to make some adjustments. Accountants should be wary of the changes. Besides affecting the accounting procedure relating to these instruments and activities, the proposed changes may also seriously impact the manner in which certain derivative hedges are structured— particularly in connection with interest rate risk management activities.

    Accounting rules for derivatives and hedging transactions were put forth by the FASB in SFAS 133, Accounting for Derivative Instruments and Hedging Activities. This standard was initially issued in June 1998. It has been amended twice since then, with relatively minor adjustments, but in 2008 the FASB issued a more substantive exposure draft with significant proposed changes. Although the comment period on this exposure draft is over, the project appears to be in limbo. Proposed changes have neither been accepted nor rejected. Further adjustments are likely to be made as the FASB moves to harmonize U.S. accounting guidance with International Financial Reporting Standards (IFRS). When attention turns to derivatives, this latest exposure draft could very likely serve as a starting point. The prospective decisions about the accounting treatment for these derivatives could have a profound impact on the structure and composition of derivatives transactions

    The Current Standard SFAS 133 has long been recognized as one of the most complicated accounting standards the FASB has ever issued. A core principle of this standard is that derivative instruments must be recognized on the balance sheet as assets or liabilities at their fair market value. The critical issue, then, is the question of how to handle gains or losses. Should they be reported in current income or elsewhere? Ultimately, SFAS 133 ended up providing different answers for different situations. The “normal” treatment simply requires gains and losses recognized in earnings. This treatment, however, is often problematic for companies that use derivatives for hedging purposes. For such entities, the preferred treatment would recognize gains or losses of derivatives concurrently with the earnings impacts of the items being hedged. The normal accounting treatment generally won’t yield this desired result, but the alternative “hedge accounting” will.

    For purposes of this discussion, attention is restricted to the two primary hedge accounting types: cash flow and fair value. For cash flow hedges, the exposure being hedged (i.e., the hedged item) must be an uncertain cash flow, forecasted to occur in a later time period. In these cases, effective gains or losses on derivatives are originally recorded in other comprehensive income (OCI) and later reclassified from OCI to earnings when the hedged item generates its earnings impact. Ineffective results are recorded directly in earnings. In essence, this accounting treatment serves to defer the derivatives’ gains or losses—but only for the portion of the derivatives’ results that are deemed to be effective—thus pairing the earnings recognition for the derivative and the hedged item in a later accounting period.

    Continued in article


    Bob Jensen and Tom Selling have been having an active, to say the least, exchange over hedge accounting where Tom Selling advocates elimination of all hedge accounting (by carrying all derivatives at fair value with changes in value being posted to current earnings). Bob Jensen thinks this is absurd, especially for derivatives that hedge unbooked transactions such as forecasted transactions or unbooked purchase contracts for commodities. Not having hedge accounting causes asymmetric distortions of earnings where the changes in value of the hedging contracts cannot be offset by changes in value of the (unbooked) hedged items. You can read more about our exchanges under the terms "Insurance Contracts" at
    http://www.trinity.edu/rjensen/acct5341/speakers/133glosf.htm#I-Terms
    Scroll down to "Insurance Contracts"

    Bob Jensen's free tutorials, audio clips, and videos on FAS 133 and IAS 39 are linked at http://www.trinity.edu/rjensen/caseans/000index.htm

     

  • Denny Beresford

    This will be a terrific resource for the academic community.  However, can anyone tell me if there are online or other training materials for us to use to familiarize ourselves with implementation of the Codification?  What I have in mind would be some short, simple cases that would show how to research accounting issues using the Codification.  I'm familiar with the more general materials that the FASB has posted on its web site and they are good for background but they aren't as helpful in actually using the Codification.  I'm going to develop some cases for my own classes in spring 2010 but I'd like to be more comfortable with using the new tools myself before doing so and would appreciate being directed to educational materials that any of you may be familiar with.  Denny Beresford University of Georgia

  • James E Bodtke

    I used it in intermediate this summer, and the changeover on July 1st went very smooth.  AAA network support did a great job on this considering the volume of hits and enrollments they must be getting.

     

  • Patricia A Johnson

    The FASB website has a one hour webcast archived that gives a good overview of how to navigate the codification and how it will work.  You will have to register to access the archived webcast from June 22,2009.

    http://www.fasb.org/cs/ContentServer?c=Page&pagename=FASB%2FPage%2FSectionPage&cid=1175801858807