FASB ASC (Accounting Standards Codifications) replaced the old numerical based rule format of US GAAP (Generally Accepted Accounting Principles) a few years ago now as we continue to deal with the larger issue of how to manage the evolution of US Accounting Standards as an Industry. The dialogue of where we go on the Rules Based US GAAP vs. the Principles based IFRS which is subject to more discretionary judgement than GAAP in reporting continues.
At a later time we will return to the conversation of GAAP vs. IFRS which is an important discussion taking place in the Industry, but for now we are limiting to the scope of GAAP for purposes of this Entry.
US GAAP under FASB updates to Accounting Standards Codifications are prepared in a new layout which moves the Rule Number based system to the Topic driven reference that mirrors your Financials and then branches to Broad Transactions and Industry Standards.
In Overview the (relatively) new Accounting Standards Codifications follows the layout of:
The Assets, Liabilities and Equity Topic areas of course correspond to your Balance Sheet where the key rule and bedrock of Accounting Truth that Assets = Liabilities + Owners (or Shareholders or Partners) Equity remains constant, Ceterius Paribus - All Other Things Being Equal.
The Revenues and Expense elements reflect your Profit and Loss (P&L) yielding Net Income (or Net Loss where Expenses exceed Revenues).
The surrounding Topics correspond to underlying foundational and overlaying reporting and transactional elements and Introduce Generally Accepted Accounting Principles (GAAP), Guidance on Presentation of Financials, determine approach for Broad Transactions captured in Financials, and cover Industry Specific needs in Accounting.
When taken in the Aggregate and Applied FASB ASC = US GAAP.
The Practice of Accounting includes knowing the Rules, Interpreting them and Applying them to Financials and underlying transactions. Our hands on experience with Business Entities of All Sizes (Fortune 500, Small and Medium in size) allows us to better support your needs in Accounting, Operations, Management and Financial Reporting, Cost Accounting, Budgeting/ Forecasting, Cash Flows Analysis, Profitability, Business Analysis, Accounting Systems implementations and more. We come from the perspective of having owned and produced Financials for operations and which provides additional insight to connect with the operational accounting perspective and to know the needs of Board Members, CEOs, COOs and key management Financial Decision Making professionals. While all leaders have unique interests we readily adapt our focus to highlight your needs in Management Decision Making support services in Advisory.
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