Accounting Standards Codification

In US accounting practices, the Accounting Standards Codification is the current single source of United States Generally Accepted Accounting Principles (GAAP). It is maintained by the Financial Accounting Standards Board (FASB).

FASB accounting standards codificationEdit

The codification is effective for interim and annual periods ending after September 15, 2009. All prior accounting standards documents were superseded as described in FASB Statement No. 168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles. Accounting literature not included in the Codification is non-authoritative.

The Codification reorganizes the thousands of U.S. GAAP pronouncements into roughly 90 accounting topics and displays all topics using a consistent structure. It also includes relevant U.S. Securities and Exchange Commission (SEC) guidance that follows the same topical structure in separate sections in the Codification.

To prepare constituents for the change, the FASB provided a number of tools and training resources.[1]

The Codification did not change GAAP, but it introduced a new structure, organized in an easily accessible, user-friendly online research system. The FASB expected the system to reduce the amount of time and effort required to research accounting issues, mitigate the risk of noncompliance with standards through improved usability of the literature, provide accurate information with real-time updates as new standards are released, and assist the FASB with the research efforts required during the standard-setting process.[2]


The three primary goals of the codification are "simplify user access by codifying all authoritative U.S. GAAP in one spot, ensure that the codification content accurately represented authoritative U.S. GAAP as of July 1, 2009, and to create a codification research system that is up to date for the released results of standard-setting activity."[2] The codification was made to make accounting standards easier to find through a single data base.

Leading up to the codification processEdit

Before the Codification, accounting standards lacked a consistent and logical structure. For the last 50 years, U.S. GAAP consisted of thousands of standards with multiple standard setters. The old U.S. GAAP were difficult to interpret, and the complexity of the standards made it hard for users to stay up to date. Problems with the old standards increased financial reporting risk and led to inefficiencies that increased cost. The Financial Accounting Standards Advisory Council then voiced its concerns due to the increase of financial reporting guidance from the old U.S. GAAP standards, and the FASB responded by launching a new project to codify the standards. The project was approved in September 2004 by the Trustees of the Financial Accounting Foundation.[2]

Public access to codificationEdit

All users must register to view any codification information. The codification allows a free basic view or paid professional view to the public. The professional view requires an annual subscription up to $940 depending on concurrent users. [3] Discounts may apply to multiple concurrent users. [4]The codification is used by accounting and reporting professionals, analysts and investors.


Each ASC reference is structured as a series of four numbers separated by hyphens: a three-digit Topic (the first digit of which represents an Area), a two-digit Subtopic, a two-digit Section, and a two- or three-digit Paragraph. [5]

Topic Series Area
100 General Principles
200 Presentation
300 Assets
400 Liabilities
500 Equity
600 Revenue
700 Expenses
800 Broad Transactions
900 Industry

Subtopic 10 is always "Overall."

Section numbers are standardized across topics (not all subtopics have all sections):

Section number Section title
00 Status
05 Overview and Background
10 Objectives
15 Scope and Scope Exceptions
20 Glossary
25 Recognition
30 Initial Measurement
35 Subsequent Measurement
40 Derecognition
45 Other Presentation Matters
50 Disclosure
55 Implementation Guidance and Illustrations
60 Relationships
65 Transition and Open Effective Date Information
70 Grandfathered Guidance
75 XBRL Elements

For instance, 210-10-20 is Balance Sheet, Overall, Glossary. 605-40-25-1 is Revenue Recognition, Gains and Losses, Recognition, first paragraph.

See alsoEdit


  1. ^ Financial Accounting Standards Board. News Release, 07/01/09.
  2. ^ a b c "FASB Accounting Standards CodificationTM Notice to Constituents (v 2.0)" (PDF). Financial Accounting Standards Board. Jul 1, 2009. Retrieved Oct 21, 2017.
  3. ^ "FASB Accounting Standards Codification®". Retrieved 2017-10-22.
  4. ^ "FASB Accounting Standards Codification®". Retrieved 2017-10-22.
  5. ^ "Codification Learning Guide". Financial Accounting Standards Board. October 26, 2015. Retrieved April 22, 2017.

External linksEdit