Melissa Mitchell

Acct 551 week 3

A. Codification was needed to lessening the time of locating, understanding and applying
the various levels of hierarchy of GAAP that were issued by numerous standard setting
bodies. Because of the difficulty in locating the correct standard the FASB believes this
resulted in the incorrect application of GAAP. The Codification project streamlines the
process of researching accounting topics by compiling all in a single location.
Codification is should lessen the probability of non-compliance, provide accurate
information in real time updates, and assist the FASB with research and convergence
(asc.fsb.org).

B. Three main goals

*Simply user access by codifying all authoritative US GAAP
*Ensure the content accurately represents US GAAP as of July 1, 2009
*Create a codification research system that is up to date for the released results of
standard-setting (asc.fasb.org).

C. The codification supersedes all existing non-SEC accounting standards this includes
FASB Statements, EITF abstracts and AICPA Statements of Position (icaew.com).
D. Codification has a menu structure. So that the main menus are the main topics, the
90 topics are allocated among nine areas. Each area has its own three-digit area
code range. All topics within an area have corresponding three-digit codes within that
range. These topics are then divided into subtopics, each of which has its own
numerical code. Subtopics are further divided into sections, which are always
numbered and named

E. .For example, all the topics in the Asset area have a three-digit code within the 300
range; 300 Assets then 305 for cash equivalents, then section 10 for overall
(FASB.org).

F. The Landing page, is the where all topics can be located for a particular subject.
Revenue landing page has Revenue recognition (605), revenue from contracts (606),
and other income (610)

G. General topic landing are the nine areas of the codification. The industries (900)
topic page gives you a list of different areas such as entertainment, airlines, or real
estate. Once you pick an industry that industry has a subtopic and the numbers
correlate with the 8 main topics such as Revenue (600). Airlines 908, revenue
recognition 605, then 2 digit section. Each Subtopic is identified by a title and either a
2 digit number (for exclusive Subtopics) or a three digit number (for shared Subtopics
H. Many changes to the content of the FASB Accounting Standards Codification do not
take effect immediately upon issuance of an update. After a content update is
approved both the current paragraph and the updated paragraph will reside in the
Codification until such time that the new guidance is completely effective for all
entities. During that period, the System will emphasize the newly amended paragraph
as pending content (asc.fsb.org).
I. SEC sections are designated with an S in front of the 2 digit number. Such as
Assets, receivables 310, troubled debt restructuring 40.
2.
A.

When warranty expense was searched I got 26 results.

If a seller provides extended warranties or some kind of maintenance at an additional
cost, on a product then they are obligated to the buyer to perform the services throughout
the period of the contract. Revenue will be recognized over the time of the contract on a
straight-line basis.

B. There were 210 results

See paragraph 210-10-S99-1. This section gives the information of items that should
appear on the balance sheet. Items that should appear include Assets and other Debits;
including cash, accounts and notes receivable, and inventories. Also, Liabilities and
stockholders equity should be on the balance sheet.
C. There were 34 results.
Paragraph superseded by Accounting Standards Update No. 2009-16. The amended
standard will improve financial reporting by eliminating the exceptions for qualifying
special-purpose entities from the consolidation guidance and the exception that permitted
sale accounting for certain mortgage securitizations when a transferor has not surrendered
control over the transferred financial assets

http://www.icaew.com/en/library/subject-gateways/accounting-standards/us-accountingstandards/aicpa-statements-and-standards#sthash.o4jKrmuf.dpuf. Accessed Jan 20

https://asc.fasb.org/imageRoot/10/5724610.pdf. Accessed Jan 20

https://www.bi.no/BibliotekFiles/_nedlastingsfiler/Database/FASB_Codification_Learning_Guid
e_3-20-12_FINAL.pdf?epslanguage=no