FASB Codification

FASB Codification

Codification is a basic reporting and constraining practice that was created to make it simpler for users to acquire GAAP by providing authorized information in an ordered framework (Blatt, & Gulbin, 2018). The Codification also includes significant portions of conclusive content released by the SEC, as well as selected SEC professional regulatory guidance and interpretations provided by the SEC; nonetheless, the Codification is not the official source of SEC guidance. It does not include all the SEC’s regulations, standards, staff guidelines, and interpretative discharges. Furthermore, the Codification excludes federal accounting rules. The Codification’s thematic framework is strongly related to the IASB’s standards (Fisher et al. 2016). There are four major categories of coding themes: presentations, budgeting report accounts, extensive exchanges, and industries (Prather et al., 2018). Within each category, there is a portion that is also closely associated with various parts of global accounting standards.

Banks are an industry that I am interested in. I chose banks because they correspond to what I’ll be discussing throughout the article on monetary stability and liability in balance sheets.

1. Topic: Balance Set reconciliations

2. Subtopics include:

• General Principles
  • Presentation
  • Assets
  • Liabilities
  • Equity
  • Revenue
  • Expenses
  • Broad Transactions

3. My two subtopics of choice are assets and liabilities.

4. Contemporary assets and current assets are among the subsections.

The accountants are highly preoccupied with assets and liabilities. Current assets are assets that can be converted to cash or utilized to meet current liabilities within a year. Short-term investments, money and money alternatives, sales figures, stocks, and the portion of prepaid liabilities that will be reimbursed within a year are all examples of typical contemporary assets. Cash equivalents are the highest liquid assets in an institution’s balance sheet’s asset division. Cash equivalents are resources that can be converted into cash quickly, such as currency trading investments, short-term governmental assets or treasury bills, appealing insurance, and business documentation. Cash equivalents are distinguished from other endeavors by their fleeting presence; they mature within three months, whereas short-term investments are those that develop in a year or less, and long-term investments are any investments that mature within a year. Accounts receivables are funds that are owed to the organization by entities to approve commodities or administrations utilizing a credit card. In many enterprise sections, debt demands are usually accomplished by issuing a receipt and either mailing or digitally delivering it to the customer, who is then required to repay it within a set period of time, known as credit terms or installment terms. Non-current assets are properties and resources that cannot be turned into cash readily. They comprise intangible resources such as plants, holdings, and equipment, as well as investment assets and long-term commercial assets.

Liabilities, on the other hand, are the creditor’s demands over the firm assets. Accountants are more interested in current liabilities in this scenario. Current liabilities comprise of banknotes, accounts receivable, accumulated payroll taxation, and accounts payable, as well as delayed payroll taxation.

Accountants need this data since balance sheets function as a close-up of an institution’s liabilities and assets at one instance. Balance sheets are important to a corporation for a variety of purposes, including when a merger is being explored or when a corporation needs to account for asset disposal, among others.

References

Ingrid E. Fisher, & Robert A. Nehmer. (2016). Using language processing to evaluate the equivalency of the FASB and IASB standards | Journal of emerging technologies in accounting. Allen Press. https://meridian.allenpress.com/jeta/article-abstract/13/2/129/116207/Using-Language-Processing-to-Evaluate-the?redirectedFrom=fulltext

JenicePrather-Kinsey, Anthony C.Hood, & ScottBoyar. (2018). Implications for IFRS principles-based and US GAAP rules-based applications: Are accountants’ decisions affected by work location and core self-evaluations? ScienceDirect.com | Science, health and medical journals, full-text articles and books. https://www.sciencedirect.com/science/article/abs/pii/S1061951818301769

Jeremy Blatt, & Jeff Gulbin. (2018). Achieving IFRS off-balance-sheet treatment in. ProQuest | Better research, better learning, better insights. https://www.proquest.com/openview/811c8f763e09152474dedc857e7e2aa7/1?pq-origsite=gscholar&cbl=38930