The Financial Accounting Standards Board (FASB) will likely officially launch their codification project July 1. This codification is a major restructuring of the FASB literature, but not the meaning of its content.
So, in short, what does this mean?
From the media release: the Codification is expected to officially become the single source of authoritative nongovernmental U.S. generally accepted accounting principles (GAAP), superseding existing FASB, American Institute of Certified Public Accountants (AICPA), Emerging Issues Task Force (EITF), and related literature. After that date, only one level of authoritative GAAP will exist. All other literature will be considered non-authoritative.
"When the Codification goes live on July 1, 2009, U.S. GAAP will be completely reconfigured in a way that will vastly improve the ease of researching U.S. GAAP issues, superseding existing authoritative literature- including FASB's Original Pronouncements," states FASB Chairman Robert Herz. "Preparers and auditors of financial statements need to familiarize themselves with the changes so that they are ready for the switch."
The Codification reorganizes the thousands of U.S. GAAP pronouncements into roughly 90 accounting topics and displays all topics using a consistent structure. Also included is relevant Securities and Exchange Commission (SEC) guidance that will follow the same topical structure in separate sections in the Codification.
To prepare constituents for the change, the FASB has provided
(1) online tutorials available on the Codification
(requires a free registration
(2) a Notice to Constituents that includes a significant amount of background (also at asc.fasb.org), and
(3) numerous presentations. In addition, the FASB has participated in various webcasts, including a webcast available in the FASB Webcast Series at www.fasb.org (also requires free registration).
The Codification does not change GAAP; instead, it introduces a new structure-one that is organized in an easily accessible, user-friendly online research system.
Troy, the student worker who wants to be an accountant, and I went through the brief tutorials this morning. His comment is one that I would agree with, the tutorials assume some knowledge of the existing accounting literature/language.
The CPA Journal has a published this helpful article:
A Guide to Using the Accounting Standards Codification by
Michael C Toerner. The CPA Journal. New York: Feb 2009. Vol. 79, Iss. 2; pg. 20, 6 pgs, available through ABI Inform Global. (Feb. 2009 articles are not available on the free CPA Journal archives at this moment.)
This is a big change that will require some basic understanding. Troy and I learned that everything about Income Tax is under 740, which is then subdivided into subcategories, much likely a cataloging system.
I would encourage you to view the four short tutorials.