FAR CPA 2

Question 1

What is the Codification?

Answer 1

The most useful guidance for practicing accountants concerning the FASB Accounting Standards Codification.

It significantly changes how US GAAP is organized and assessed and includes all authoritative GAAP for nongovernmental except for publicly traded firms. Also contains SEC guidance for publicly traded firms.

Question 2

What is issued as part of the due-process activities of the FASB for amending the Codification?

Answer 2

Changes and updates to the codification are proposed through Accounting Standards Update (ASUs).

Question 3

What is a statement of position (SOP)?

Answer 3

Issued by the AICPA from 1974-2009, but are no longer in use. Any SOP addressing accounting guidance have been superseded by the Codification.

Question 4

What are accounting research bulletins (ARBs)?

Answer 4

Issues by the Committee on Accounting Procedures from 1938-1959. Any ARBs in effect at the time of the Codification have been superseded.

Question 5

What are staff accounting bulletins (SABs)?

Answer 5

Issued by the SEC and reflect views of the SEC. SABs are not formally part of the Codification, but are important to preparers of financial statements of public companies.