The Financial Accounting Standard Board (FASB) was created in 1973 with the purpose of the board is to (according with FASB) establish standards of financial accounting that govern the preparation of financial reports by nongovernmental entities. Those standards are officially recognized as authoritative by the Securities and Exchange Commission (SEC) (Financial Reporting Release No. 1, Section 101, and reaffirmed in its April 2003 Policy Statement) and the American Institute of Certified Public Accountants (Rule 203, Rules of Professional Conduct, as amended May 1973 and May 1979). FASB Accounting Standards Codification (Accounting Standards Codification) which represents the source of authoritative standards of accounting and reporting, other than those issued by the SEC, recognized by the FASB to be applied by nongovernmental entities. Some of those standards are; ASC 830-230-55-1 - Statement of Cash Flows for Manufacturing Entity with Foreign Operations, ASC 926-330-35-1 - Products Held for Sale, ASC 954-440-25-2 - Continuing Care Retirement Community, ASC 505-20-50-1 – Equity, Stock Dividends and Stock Split and Disclosure, ASC 710-10-05-6 - Compensated Absences.
FASB Accounting Standards Codification (Accounting Standards Codification) which represents the source of authoritative standards of accounting and reporting, other than those issued by the SEC, recognized by the FASB to be applied by nongovernmental entities. According with (Becker, 2015) the codification is divided by Areas, Topics, Subtopics, sections, and related tables of contents. Examples of the standards are; ASC 830-230-55-1 - Statement of Cash Flows for Manufacturing Entity with Foreign Operations, ASC 926-330-35-1 - Products Held for Sale, ASC 954-440-25-2 - Continuing Care Retirement Community, ASC 505-20-50-1 – Equity, Stock Dividends and Stock Split and Disclosure, ASC 710-10-05-6 - Compensated Absences.
The Standard Codification ASC 830-230-55-1 the letters ASC represent and area of the accounting standard codification. The number 830 represent the topic “Foreign Currency Matter”, the number 230 represent the subtopic “Statement of Cash Flow”, the number 55 this represent the section “Implementation Guidance and Illustrations”, and the number 1 it is the paragraph with an “example of a Statement of Cash Flows for Manufacturing Entity With Foreign Operations”. This company use the direct method in their Statement of Cash Flow and it is a U.S. manufacturing company with foreign operations. This example show us how companies with foreign operation can work with different kind of currency at the same time. We also can see the disclosure of the fluctuation of the exchange rate in the statement. (FASB Accounting Codification)
Standard Codification ASC 926-330-35-1 the letters ASC represent and area of the accounting standard codification. The number 926 represent the topic “Entertainment-Film”, the number 330 represent the subtopic “Inventory”, the number 35 represent the section “Subsequent Measurement” and the number 1it is the paragraph “Products held for sales”. On this statement we are talking about some issued in the entertainment industry. Especially in the inventory area and how they has to apply the accounting principles but they need to make sure that those can differ from all the guidance in their industry taking in consideration the amortization and depreciation of the inventory. In the paragraph there are talking about how carefully we need to be at the time when we do adjustments in the balance sheet regarding the inventory in the net realizable value and any obsolescence. (FASB Accounting Codification)
The Standard Codification ASC 954-440-25-2 the letters ASC represent and area of the accounting standard codification. The number 954 represent the topic “Health Care Entities”, the number 440 represent the subtopic “Commitments”, the number 25this represent the section “Recognition”, and the number 2 it is the paragraph with an explanation regarding the “Continuing Care Retirement Community”. This statement explain how the health care industry needs to follow the accounting principles regarding the industry related to the commitment in the services. In the section 25 they explain how carefully we has to be at the recognition in the financial statements. Also in the paragraph they are talking about the financial statements recognition but regarding the liability regarding the evaluation of future services to the retirement community and this evaluation must be annually. (FASB Accounting Codification)
The Standard Codification ASC 505-20-50-1 the letters ASC represent and area of the accounting standard codification. The number 505 represent the topic “Equity”, the number 20 represent the subtopic “Stock Dividends”, the number 50 this represent the section “Disclosure”, and the number 1 it is the paragraph with a “General” explanation regarding to the stock dividend and the stock split. In this statement we will find information regarding equity accounts in different kind of corporations and the financial statements. It also speak about the difference between the stock dividend and the split and the definition of each one. With this statement we can we can learn how important it is to use each of the terms in a correct manner even when the form and substance of the words are defined as one. Another important point on this is the disclosure in the financial statements. (FASB Accounting Codification)
The last statement it is the Standard Codification ASC 710-10-05-6 the letters ASC represent and area of the accounting standard codification. The number 710 represent the topic “Compensation-General”, the number 10 represent the subtopic “Overall”, the number 05 this represent the section “Overview and Background”, and the number 6 it is the paragraph with a “Deferred Compensation Arrangements”. This statement is related to compensations and how to apply them into the financial statements. We can see what are the issues, the principals, and the standards applicable to the compensation plan in your company disregarding on what kind of operations or the industry you are doing. The paragraph provide information regarding the deferred compensation arrangements. (FASB Accounting Codification)
References
505 Equity 20 Stock Dividends and Stock Splits 50 Disclosure. (2015). In FASB Accounting Standard Codification. Retrieved July 23, 2015, from https://asc.fasb.org/viewpage?ovcmd=goto&codification_text=505-20-50&codification_submit=GO+TO
710 Compensation—General 10 Overall 05 Overview and Background. (2015). In FASB Accounting Standard Codification. Retrieved July 23, 2015, from https://asc.fasb.org/viewpage?ovcmd=goto&codification_text=710-10-05&codification_submit=GO+TO
830 Foreign Currency Matters 230 Statement of Cash Flows 55 Implementation Guidance and Illustrations. (n.d.). In FASB Accounting Standard Codification.Retrieved July 23, 2015, from https://asc.fasb.org/section&trid=2175942&search_marker=searchresult&query=KzgzMC0yMzAtNTUtMQ==
926 Entertainment—Films 330 Inventory 35 Subsequent Measurement. (2015). In FASB Accounting Standard Codification. Retrieved July 23, 2015, from https://asc.fasb.org/viewpage?ovcmd=goto&codification_text=926-330-35-&codification_submit=GO+TO
954 Health Care Entities 440 Commitments 25 Recognition. (2015). In FASB Accounting Standard Codification. Retrieved July 23, 2015, from https://asc.fasb.org/viewpage?ovcmd=goto&codification_text=954-440-25&codification_submit=GO+TO
Codification Overview. (2015). In Becker Professional Education. Retrieved July 23, 2015, from http://www.becker.com/cpa-review/resources/about-exam/exam-content/codification
FACTS ABOUT FASB. (n.d.). In FASB Financial Accounting Standard Board. Retrieved July 23, 2015, from http://www.fasb.org/jsp/FASB/Page/SectionPage&cid=1176154526495
