Accounting Standards Codification Assignment Help

Accounting Standards Codification

Financial accounting standards board is a private sector, an independent organization which has the main purpose of creation of financial and accounting standards for the organizations. It was being established in the year 1973 and is responsible for laying down various kinds of standards for the organizations. It is being involved in the usage of a transparent process in the issuance of financial accounting standards so that, the investors could work towards making better decisions in the area of working. 

Financial accounting federation works towards providing support to financial accounting standard board. This was being established in the year 1972. This is an independent private sector organization which is being responsible for the areas such as supervision, administration, financing and appointment of government accounting standard board and FASB. The collective purpose of these associations is to make sure that, financial accounting and reporting standards are being improved and useful information is being provided to the investors in a proper and appropriate way.

FASB Accounting Standards Codification

The accounting standard codification was being launched by FASB on July 1, 2009. The codification is being found to be effective in the course of working toward existing accounting standards and making sure that the standards are being followed by the people in the best possible ways. There are a total of 90 topics in the accounting standard codification and those topics are to be taken into account in a proper way. The topics also include Securities and Exchange Commission related topics which also follow the same format as the normal topics being provided. 

Codification is not related to making changes in GAAP but it ensures that a proper structure is being formed and that structure works towards providing a new and well-organized structure. This particular thing is being reorganized to ensure that, there is the reduction in the amount of time being taken for the purpose of working out on a particular issue. The other thing being identified include the tasks of ensuring that, accurate standards are being developed and those standards are being worked upon for the purpose of ensuring that, better areas of doing the tasks are being carried out well without any trouble or issue arising.

Quick Reference Guide

The following is a quick reference guide being provided to the users for the purpose of ensuring that, assistance is being provided regarding the significant listing of codification topics and sections in a proper way. The sections and cross-referencing are crucial in the course of the usage of accounting standards.

Accounting Standards Codification

Basic format of codification

FASB ASC XXX-YY-ZZ-PP

Where, (XXX = Topic YY = Subtopic, ZZ = Section, and PP = Paragraph)

Quick cross reference

Some important FASB Accounting Standard Codification is as follows:

• ASC 450
• ASC 805
• ASC 310
• ASC 820
• ASC 360
• ASC 840
• 
  Accounting Standards Codification ASC 450:  Contingencies

This codification helps in finding out the accounting and disclosure requirements in the course of loss and gain by way of contingencies. The loss from contingency is being recognized only at the time when the estimated loss is being expected that an asset is being reduced or a liability has increased. The loss contingencies which do not meet the identified criteria are not required to be disclosed in the financial statements of the organization. The gain contingencies are being shown in financial statement at the time when revenue is required to be recognized before the realization occurs. 

Sub-topics

a.       ASC 450-10: It makes the establishment of scope and exception regarding topics of contingencies, and provides required definitions and also has the inclusion of links to the standards which appear in the subtopic 450-20 and 450-30. 

b.      ASC 450-20 loss contingency: It includes the following examples of loss contingencies which are being included in the topic being provided below: 

c.       ASC 450-30 Gain Contingencies: This provides guidance in relation to gain contingency in a proper way. These gain contingencies are not normally being included in the financial statements of the organization in the course of disclosures. The revenue is going to be recognized before actual realization. 

Accounting Standard Codification 805 – Business Combination

The accounting is being governed by accounting standard codification 805 at the time of business acquisition. It shows that each of the assets and liabilities being acquired should be recorded at fair market prices. It becomes difficult for the organization in the course of determination of fair prices as an individual cannot just simply look at the statements for finding out fair prices. It is essential to have the assistance of valuation report for the purpose of identification of fair market price of a particular category of asset. 

ASC 805 consists of 5 subtopics

1. ASC 805-10 overall: It provides guidance in the course of acquisition method and it considers the following areas.

2. ASC 805-20: this topic makes discussion regarding recognition of the following items.
1. Identification of assets
2. Assumption of liabilities
3. Non-controlling interest
3. ASC-805-30: It provides assistance regarding guidance and measurement of goodwill or gain from a bargain purchase made.
4. ASC 805-40: It provides guidance regarding acquisition method adopted to a business combination which is in the form of reverse acquisition.
5. ASC 805-50: It provides guidance on accounting topics which work towards accounting and reporting tasks which are having similar characteristics in the course of business combinations but do not meet the requirements to be termed as business combinations. The issue arises in this particular area at a particular point of time wherein, business combinations are taking place at a particular point in time. 

Accounting Standards Codification 310: Receivables

This code helps in providing transparency about the credit loss and credit quality in the course of finance receivables. The financial statement user is being helped in the determination of credit risk exposure and calculation of adequacy in the course of its allowance regarding the credit losses being required to be taken into consideration. There are four subtopics of this particular thing. 

1. ASC 310-10 Overall: It provides guidance regarding income which is yet to be received and notes to the income which is yet to be received on account of credit sales or any other transaction being carried out by the organization. It includes acquisition, development and construction arrangements.
2. ASC 310-20: This topic provides guidance regarding recognition, measurement, de-recognition, and disclosure of non-refundable fees being identified. Here, the origination costs with lending activities and re-purchase projects would be taken into consideration in the area of doing the working.
3. ASC 310-30: This is related to the fact that, loans are required to be granted on the basis of proper recognition, measurement and disclosure guidance. This is due to the fact that, originality is being obtained by completion of a particular transfer. The investor would be required to collect the all the payments which are being receivable to him at a particular point in time.
4. ASC 310-40: It provides guidance regarding measurement, recognition, de-recognition, disclosure and implementation guidance related issues regarding troubled debt restructuring and it is being focused upon records of the creditors at a particular point of time. 

Accounting Standard Codification 820

            This codification is being related to fair value measurement and disclosures. This provides a single framework for the purpose of measurement of fair value and it also requires disclosure regarding fair value. The topic provides information of fair value as exit price and it is being used on the basis of fair value hierarchy. This result in the market based instead of entity-based measurement. Following are being included in the form of sub-topics. 

1. Defining fair value
2. Providing a single topic framework for measurement of fair value
3. Requiring disclosure about fair value measurements. 

Accounting Standard Codification 360 – Property, Plant, and Equipment

It provides information regarding the manner in which disclosures are to be made regarding impairment of long-lived assets and the manner in which long-lived assets are to be disposed of. This makes sure that an impairment loss is being recognized if carrying the amount of the asset is not recoverable. There are two topics in which this particular code is being divided. The topics include the following: 

a.       ASC 360-10 Overall: It provides guidance regarding the manner in which accounting for plant, property, and equipment is to be carried out along with respective depreciation to be accounted for. This topic comprises of impairment and disposal of living assets. 

b.      ASC 360-20 Real Estate Sales: This topic provides guidance regarding the manner in which accounting for sale of real estate property would be carried out. 

Accounting Standard Codification 840 – Leases

            In the course of accounting, there are two different kinds of leases. First of the categories of the lease is in the form of operating lease and another category of the lease is a financial lease. Operating lease does not have a recording of assets and liabilities in financial statements. On the other hand, the capital lease does have the recording of assets and liabilities in the financial statements. It provides the description of the point where the lease is required to be recognized in financial statements of the organization. The following subtopics are being identified in the course of these leases. 

1. ASC 840-10: Here, the leases are being identified well and the identification of leases is being made on the basis of the category where the lease exists.
2. ASC 840-20: Here, the leases are being classified as an operating lease by the people who are being involved.
3. ASC 840-30: Here, the accounting is being made and the lease is being recognized as a capital lease.
4. ASC 840-40: here, the property is being sold by the owner and lease of the property is being given back to the owner. The accounting guidance is being provided regarding sales back transactions. 

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