Wiley GAAP 2018 E-Book

Joanne M. Flood

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Serie: Wiley Regulatory Reporting
• Sprache: Englisch

Seitenzahl: 3288

Veröffentlichungsjahr: 2018

Beschreibung

Get the most comprehensive coverage of the FASB Codification and the latest FASB updates in a single volume Wiley GAAP 2018: Interpretation and Application of Generally Accepted Accounting Principles is a thorough study and analysis of all US Generally Accepted Accounting Principles (GAAP) set forth in the pronouncements of the FASB (Financial Accounting Standards Board) Codification. All topics are explained with relevant terminology and practice-oriented real world examples. Each chapter is composed of a discussion of perspectives and issues, definitions of terms, concepts, rules, and examples. US GAAP is constantly being updated, and its users require expert interpretation and explanation of the relevant principles. This book provides the most comprehensive coverage of each Codification topic. It contains clear, user-friendly guidance on every pronouncement. * Fully up-to-date with all the latest changes, including those to inventory, financial instruments, revenue, and leases * Includes more real-world examples and illustrations than competing titles * Arranged according to the FASB Codification, all topics are referenced to the Codification Wiley GAAP 2018 renders GAAP more understandable and accessible for research and is designed to reduce the amount of time and effort needed to solve accounting research and implementation issues, making it the best go-to source for CPAs and others working in accounting.

Leseprobe

CONTENTS

Cover

Series Page

Title Page

Copyright

Preface

About the Author

Codification Taxonomy

1: ASC 105 Generally Accepted Accounting Principles

Perspectives and Issues

Definitions of Terms

Concepts, Rules, and Examples

Search Authoritative Literature (Step 6)—Further Explanation

The Concept of Materiality

Descriptions of Materiality

The Conceptual Framework

CON 8—Chapter 1: The Objective of General Purpose Financial Reporting

CON 8—Chapter 3: Qualitative Characteristics of Useful Financial Information

CON 5: Recognition and Measurement in Financial Statements of Business Enterprises

CON 6: Elements of Financial Statements

CON 7: Using Cash Flow Information and Present Value in Accounting Measurements

2: ASC 205 Presentation Of Financial Statements

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

3: ASC 210 Balance Sheet

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

4: ASC 215 Statement of Shareholder Equity

Perspective and Issues

5: ASC 220 Comprehensive Income

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

Notes

6: ASC 225 Income Statement

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

Notes

7: ASC 230 Statement of Cash Flows

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

8: ASC 235 Notes to Financial Statements

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

9: ASC 250 Accounting Changes and Error Corrections

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

Notes

10: ASC 255 Changing Prices

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

11: ASC 260 Earnings Per Share

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

Comprehensive Example

Notes

12: ASC 270 Interim Reporting

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

Part I—Requirements Applicable to All reporting Entities

Part II—Requirements Applicable to Public Reporting Entities

13: ASC 272 Limited Liability Entities

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

14: ASC 274 Personal Financial Statements

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

15: ASC 275 Risks and Uncertainties

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

16: ASC 280 Segment Reporting

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

17: ASC 305 Cash and Cash Equivalents

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

18: ASC 310 Receivables

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

Other Sources (ASC 310-10-60)

Notes

19: ASC 320 Investments—Debt and Equity Securities1

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

Notes

20: ASC 320 Investments—Debt Securities1

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

Notes

21: ASC 321 Investments—Equity Securities

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

22: ASC 323 Investments—Equity Method and Joint Ventures

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

23: ASC 325 Investments—Other

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

24: ASC 326 Financial Instruments—Credit Losses

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

25: ASC 330 Inventory

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

Notes

26: ASC 340 Other Assets and Deferred Costs

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

Notes

27: ASC 350 Intangibles—Goodwill and Other

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

Notes

28: ASC 360 Property, Plant, and Equipment

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

Notes

29: ASC 405 Liabilities

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

30: ASC 410 Asset Retirement and Environmental Obligations

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

31: ASC 420 Exit or Disposal Cost Obligations

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

32: ASC 430 Deferred Revenue

33: ASC 440 Commitments

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

34: ASC 450 Contingencies

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

35: ASC 460 Guarantees

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

36: ASC 470 Debt

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

37: ASC 480 Distinguishing Liabilities from Equity

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

Mandatorily Redeemable Shares and Similar Instruments

38: ASC 505 Equity

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

Notes

39: ASC 605 Revenue Recognition1

Revenue Recognition—General Principles

ASC 605-10, Overall

Definitions of Terms

Concepts, Rules, and Examples

ASC 605-15, Products

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

ASC 605-20, Service Revenues

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

ASC 605-25, Multiple-Element Arrangements

Perspective and Issues

ASC 605-28, Milestone Method

Perspective and Issues

Concepts, Rules, and Examples

ASC 605-35, Construction-Type and Production-Type Contracts

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

ASC 605-45, Principal-Agent Considerations

Perspective and Issues

Concepts, Rules, and Examples

ASC 605-50, Customer Payments and Incentives

Notes

40: ASC 606 Revenue from Contracts With Customers

Overview

Step 1: Identify the Contract with the Customer

Step 2: Identifying the Performance Obligations

Step 3: Determine the Transaction Price

Step 4: Allocate the Transaction Price

Step 5: Recognize Revenue when (or as) the Entity Satisfies a Performance Obligation

Other Issues

Notes

41: ASC 610 Other Income

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

42: ASC 705 Cost of Sales and Services

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

43: ASC 710 Compensation—General

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

44: ASC 712 Compensation—Nonretirement Post-Employment Benefits

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

45: ASC 715 Compensation—Retirement Benefits

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

46: ASC 718 Compensation—Stock Compensation

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

47: ASC 720 Other Expenses

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

48: ASC 730 Research and Development

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

49: ASC 740 Income Taxes

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

Notes

50: ASC 805 Business Combinations

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

51: ASC 808 Collaborative Arrangements

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

52: ASC 810 Consolidations

Perspective and Issues

Definitions of Terms

Consolidation Models—Introduction and Background

The VIE Model

Voting Interest Model

53: ASC 815 Derivatives and Hedging

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

54: ASC 820 FAIR VALUE MEASUREMENTS

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

55: ASC 825 FINANCIAL INSTRUMENTS

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

ASC 825-20

56: ASC 830 Foreign Currency Matters

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

Accounts to be Remeasured Using Historical Exchange Rates

57: ASC 835 Interest

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

58: ASC 840 LEASES 1

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

59: ASC 842 Leases

FASB Issues New Standard for Lease Accounting

60: ASC 845 Nonmonetary Transactions

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

61: ASC 850 Related-Party Disclosures

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

62: ASC 852 Reorganizations

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

63: ASC 853 Service Concession Arrangements

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

64: ASC 855 Subsequent Events

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

65: ASC 860 Transfers and Servicing

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

66: ASC 900S Specialized Industry GAAP

Contractors—Federal Government (ASC 912)1

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

Entertaintment—Broadcasters (ASC 920)3

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

Entertainment—Cable Television (ASC 922)5

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

Entertainment—Casinos (ASC 924)7

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

Entertainment—Film (ASC 926)8

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

Entertainment—Music (ASC 928)9

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

Extractive Activities—Oil and Gas (ASC 932)10

Perspective and Issues

Concepts, Rules, and Examples

Financial Services—Depository and Lending (ASC 942)11

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

Financial Services—Insurance (ASC 944)

Perspective and Issues

Concepts, Rules, and Examples

Financial Services—Investment Companies (ASC 946)13

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

Financial Services—Mortgage Banking (ASC 948)16

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

Financial Services—Title Plant (ASC 950)

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

Franchisors (ASC 952)21

Perspective and Issues

Definitions of Terms

Concepts and Rules

Not-for-Profit Entities (ASC 958)22

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

Plan Accounting (ASC 960, ASC 962, ASC 965)

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

Real Estate—General (ASC 970)25

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

Real Estate—Retail Land (ASC 976)26

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

Real Estate Time-Sharing Activities (ASC 978)28

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

Regulated Operations (ASC 980)29

Perspective and Issues

Concepts, Rules, and Examples

Software (ASC 985)31

Perspective and Issues

Definitions of Terms

Concepts, Rules, and Examples

Appendix A: Definitions of Terms

Appendix B: Disclosure and Presentation Checklist for Commercial Businesses

Index

End User License Agreement

List of Tables

Table 1

Table 2

Table 3

List of Illustrations

Guide

Cover

Table of Contents

Preface

Chapter 1

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Wiley GAAP 2018

Interpretation and Application of Generally Accepted Accounting Principles

Joanne M. Flood

Cover design and image: Wiley

Copyright © 2018 by John Wiley & Sons, Inc. All rights reserved.

Copyright © by the American Institute of Certified Public Accountants, Inc. Several items were quotes or referred to with permission.

Portions of this book have their origin in copyrighted materials from the Financial Accounting Standards Board. These are noted by reference to the specific pronouncement except for the definitions introduced in bold type that appear in a separate section at the beginning of each chapter. Complete copies are available directly from the FASB. Copyright © by the Financial Accounting Standards Board, 401 Merritt 7, PO Box 5116, Norwalk, Connecticut 06856-5116, USA.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey.

Published simultaneously in Canada.

No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, (978) 750–8400, fax [phone], or on the Web at www.copyright.com. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, (201) 748–6011, fax [phone], or online at www.wiley.com/go/permissions.

Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Neither the publisher nor author shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

For general information on our other products and services or for technical support, please contact our Customer Care Department within the United States at (800) 762–2974, outside the United States at (317) 572–3993, or fax [phone].

Wiley publishes in a variety of print and electronic formats and by print-on-demand. Some material included with standard print versions of this book may not be included in e-books or in print-on-demand. If this book refers to media such as a CD or DVD that is not included in the version you purchased, you may download this material at http://booksupport.wiley.com. For more information about Wiley products, visit www.wiley.com.

ISBN 978-1-119-39654-3 (Paperback)

ISBN 978-1-119-39650-5 (ePDF)

ISBN 978-1-119-39646-8 (ePub)

ISBN 978-1-119-39651-2 (obk)

Preface

Wiley GAAP 2018: Interpretation and Application provides analytical explanations, copious illustrations, and nearly 300 examples of all current generally accepted accounting principles. The book integrates principles promulgated by the FASB in its Accounting Standards Codification.™ Wiley GAAP is organized to align fully with the structure of the FASB Codification. Each chapter begins with a list of the Subtopics included within the Topic, scope and scope exceptions, technical alerts of any FASB Updates, and an overview of the Topic. The remainder of each chapter contains a detailed discussion of the concepts and practical examples and illustrations. This organization facilitates the primary objective of the book—to assist financial statement preparers and practitioners in resolving the myriad practical problems faced in applying GAAP.

Hundreds of meaningful, realistic examples guide users in the application of GAAP to the complex fact situations that must be dealt with in the real world practice of accounting. In addition to this emphasis, a major strength of the book is that it explains the theory of GAAP in sufficient detail to serve as a valuable adjunct to accounting textbooks. Much more than merely a reiteration of currently promulgated GAAP, it provides the user with the underlying conceptual bases for the rules. It facilitates the process of reasoning by analogy that is so necessary in dealing with the complicated, fast-changing world of commercial arrangements and transaction structures. It is based on the author's belief that proper application of GAAP demands an understanding of the logical underpinnings of all its technical requirements.

As a bonus, a comprehensive presentation and disclosure checklist, available online to all Wiley GAAP purchasers, offers practical guidance on preparing financial statements for commercial entities in accordance with GAAP. For easy reference and research, the checklist also follows the order of the codification. Go to www.wiley.com/go/GAAP2018 (password: Flood).

The following FASB Accounting Standards Updates were issued since Wiley GAAP 2017 and through May 2017. Their requirements are incorporated into this edition of Wiley GAAP, as/and where appropriate, and/or in the Technical Alert section at the beginning of the topic referenced in the ASU title.

ASU 2016-12,

Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients

ASU 2016-13,

Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments

ASU 2016-14,

Not-for-Profit Entities (Topic 958): Presentation of Financial Statements of Not-for-Profit Entities

ASU 2016-15,

Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments

ASU 2016-16,

Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory

ASU 2016-17,

Consolidation (Topic 810): Interests Held through Related Parties That Are Under Common Control

ASU 2016-18,

Statement of Cash Flows (Topic 230): Restricted Cash (a Consensus of the Emerging Issues Task Force)

ASU 2016-19,

Technical Corrections and Improvements

ASU 2017-01,

Business Combinations (Topic 805): Clarifying the Definition of a Business

ASU 2017-02,

Not-for-Profit Entities—Consolidation (Subtopic 958-810): Clarifying When a Not-for-Profit Entity That Is a General Partner or a Limited Partner Should Consolidate a For-Profit Limited Partnership or Similar Entity

ASU 2017-03,

Accounting Changes and Error Corrections (Topic 250) and Investments—Equity Method and Joint Ventures (Topic 323): Amendments to SEC Paragraphs Pursuant to Staff Announcements at the September 22, 2016 and November 17, 2016 EITF Meetings

ASU 2017-04,

Intangibles—Goodwill and Other (Topic 350): Simplifying the Test of Impairment

ASU 2017-05,

Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets

ASU 2017-06,

Plan Accounting: Defined Benefit Pension Plans (Topic 960), Defined Contribution Plans (Topic 962), Health and Welfare Benefit Plans (Topic 965): Employee Benefit Plans Master Trust Reporting (A Consensus of the Emerging Issues Task Force)

ASU 2017-07,

Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost

ASU 2017-08,

Receivables—Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities

ASU 2017-09,

Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting

ASU 2017-10,

Service Concession Arrangements (Topic 853): Determining the Customer of the Operation Services (A Consensus of the Emerging Issues Task Force)

Significant accounting changes are on the horizon. In the next year, the FASB is expected to make strides on the following major projects and others:

Consolidations

Nonemployee Share-based Payments

Financial Instruments—Hedging

Disclosure Framework

Readers are encouraged to check the FASB website for status updates to the above and other FASB projects.

In response to the 2011 report of the Blue Ribbon Panel on Standard Setting for Private Companies, the FASB created the Private Company Council. The FASB issued a framework for the FASB and the PCC to use in determining whether alternatives to existing and proposed U.S. GAAP are warranted for private companies. Since 2013, FASB has issued five ASUs that are consensuses of the PCC.

The author's wish is that this book will serve preparers, practitioners, faculty, and students as a reliable reference tool to facilitate their understanding of, and ability to apply, the complexities of the authoritative literature.

Joanne M. Flood

January 2017

About the Author

Joanne M. Flood, CPA, is an author and independent consultant on accounting and auditing technical topics and e-learning. She has experience as an auditor in both an international firm and a local firm and worked as a senior manager in the AICPA's Professional Development group. She received her MBA Summa Cum Laude in Accounting from Adelphi University and her bachelor's degree in English from Molloy College.

While in public accounting, Joanne worked on major clients in retail, manufacturing, and finance and on small business clients in construction, manufacturing, and professional services. At the AICPA, she developed and wrote e-learning, text, and instructor-led training courses on U.S. and international standards. She also produced training materials in a wide variety of media, including print, video, and audio, and pioneered the AICPA's e-learning product line. Joanne resides on Long Island, New York, with her daughter, Elizabeth. Joanne is the author of the following Wiley publications:

Financial Disclosure Checklist

Wiley GAAP 2018: Interpretation and Application of Generally Accepted Accounting Principles

Wiley Practitioner's Guide to GAAS 2018: Covering all SASs, SSAEs, SSARSs, and Interpretations

Wiley GAAP: Financial Statement Disclosures Manual (Wiley Regulatory Reporting)

Wiley Revenue Recognition

And the following AICPA online and live CPE programs:

Audit Staff Essentials, Level 1—New Hire

Audit Staff Essentials, Level 2—Experienced Staff

Audit Staff Essentials, Level 3—Audit Senior/In-Charge

Codification Taxonomy

Topic # and title

Subtopic # and title

I. General Principles and Objectives

  105

Generally Accepted Accounting Principles

105-10

Overall

II. Overall Financial Reporting, Presentation, and Display Matters

A. Overall Presentation of Financial Statements

  205

Presentation of Financial Statements

205-10

Overall

205-20

Discontinued Operations

205-30

Liquidation Basis of Accounting

205-40

Going Concern

  210

Balance Sheet

210-10

Overall

210-20

Offsetting

  215

Statement of Shareholders' Equity

215-10

Overall

  220

Comprehensive Income

220-10

Overall

  225

Income Statement

225-10

Overall

225-20

Unusual or Infrequently Occurring Items

225-30

Business Interruption Insurance

  230

Statement of Cash Flows

230-10

Overall

  235

Notes to Financial Statements

235-10

Overall

B. Various Financial Reporting, Presentation, and Display Matters

  250

Accounting Changes and Error Corrections

250-10

Overall

  255

Changing Prices

255-10

Overall

  260

Earnings Per Share

260-10

Overall

  270

Interim Reporting

270-10

Overall

270-40

Income Taxes

  272

Limited Liability Entities

272-10

Overall

  274

Personal Financial Statements

274-10

Overall

  275

Risks and Uncertainties

275-10

Overall

  280

Segment Reporting

280-10

Overall

III. Transaction-Related Topics

A. Financial Statement Accounts

  305

Cash and Cash Equivalents

305-10

Overall

  310

Receivables

310-10

Overall

310-20

Nonrefundable Fees and Other Costs

310-30

Loans and Debt Securities Acquired with Deteriorated Credit Quality

310-40

Troubled Debt Restructurings by Creditors

  320

Investments—Debt and Equity Securities

320-10

Overall

  321

Investments—Equity Securities

321-10

Overall

  323

Investments—Equity Method and Joint Ventures

323-10

Overall

323-30

Partnerships, Joint Ventures, and Limited Liability Entities

  325

Investments—Other

325-10

Overall

325-20

Cost Method Investments

325-30

Investments in Insurance Contracts

325-40

Beneficial Interests in Securitized Financial Assets

  330

Inventory

330-10

Overall

  340

Other Assets and Deferred Costs

340-10

Overall

340-20

Capitalized Advertising Costs

340-30

Insurance Contracts that Do Not Transfer Insurance Risk

340-40

Contracts with Customers

  350

Intangibles—Goodwill and Other

350-10

Overall

350-20

Goodwill

350-30

General Intangibles Other Than Goodwill

350-40

Internal-Use Software

350-50

Website Development Costs

  360

Property, Plant, and Equipment

360-10

Overall

360-20

Real Estate Sales

  405

Liabilities

405-10

Overall

405-20

Extinguishment of Liabilities

405-30

Insurance-Related Assessments

405-40

Obligations Resulting from Joint and Several Liabilities

  410

Asset Retirement and Environmental Obligations

410-10

Overall

410-20

Asset Retirement Obligations

410-30

Environmental Obligations

  420

Exit or Disposal Cost Obligations

420-10

Overall

  430

Deferred Revenue

430-10

Overall

  440

Commitments

440-10

Overall

  450

Contingencies

450-10

Overall

450-20

Loss Contingencies

450-30

Gain Contingencies

  460

Guarantees

460-10

Overall

  470

Debt

470-10

Overall

470-20

Debt with Conversion and Other Options

470-30

Participating Mortgage Loans

470-40

Product Financing Arrangements

470-50

Modifications and Extinguishments

470-60

Troubled Debt Restructurings by Debtors

  480

Distinguishing Liabilities from Equity

480-10

Overall

  505

Equity

505-10

Overall

505-20

Stock Dividends and Stock Splits

505-30

Treasury Stock

505-50

Equity-Based Payments to Non-Employees

505-60

Spin-offs and Reverse Spin-offs

  605

Revenue Recognition

605-10

Overall

605-15

Products

605-20

Services

605-25

Multiple-Element Arrangements

605-28

Milestone Method

605-30

Rights to Use

605-35

Construction-Type and Production-Type Contracts

605-40

Gains and Losses

605-45

Principal Agent Considerations

605-50

Customer Payments and Incentives

  606

Revenue from Contracts with Customers

606-10

Overall

1

  610

Other Income

610-10

Overall

1

610-20

Gains and Losses from the Derecognition of Nonfinancial Assets

610-30

Gains and Losses on Involuntary Conversions

  705

Cost of Sales and Services

705-10

Overall

705-20

Accounting for Consideration Received from a Vendor

1

  710

Compensation—General

710-10

Overall

  712

Compensation—Nonretirement Postemployment Benefits

712-10

Overall

  715

Compensation—Retirement Benefits

715-10

Overall

715-20

Defined Benefit Plans—General

715-30

Defined Benefit Plans—Pensions

715-60

Defined Benefit Plans—Other Postretirement

715-70

Defined Contribution Plans

715-80

Multiemployer Plans

  718

Compensation—Stock Compensation

718-10

Overall

718-20

Awards Classified as Equity

718-30

Awards Classified as Liabilities

718-40

Employee Stock Ownership Plans

718-50

Employee Share Purchase Plans

718-740

Income Taxes

  720

Other Expenses

720-10

Overall

720-15

Start-Up Costs

720-20

Insurance Costs

720-25

Contributions Made

720-30

Real and Personal Property Taxes

720-35

Advertising Costs

720-40

Electronic Equipment Waste Obligations

720-45

Business and Technology Reengineering

720-50

Fees Paid to the Federal Government by Pharmaceutical Manufacturers and Health Insurers

  730

Research and Development

730-10

Overall

730-20

Research and Development Arrangements

  740

Income Taxes

740-10

Overall

740-20

Intraperiod Tax Allocation

740-30

Other Considerations or Special Areas

B. Broad Transactional Categories

  805

Business Combinations

805-10

Overall

805-20

Identifiable Assets and Liabilities, and Any Noncontrolling Interest

805-30

Goodwill or Gain from Bargain Purchase, Including Consideration Transferred

805-40

Reverse Acquisitions

805-50

Related Issues

805-740

Income Taxes

  808

Collaborative Arrangements

808-10

Overall

  810

Consolidation

810-10

Overall

810-20

Control of Partnerships and Similar Entities

810-30

Research and Development Arrangements

  815

Derivatives and Hedging

815-10

Overall

815-15

Embedded Derivatives

815-20

Hedging—General

815-25

Fair Value Hedges

815-30

Cash Flow Hedges

815-35

Net Investment Hedges

815-40

Contracts in Entity's Own Equity

815-45

Weather Derivatives

  820

Fair Value Measurements

820-10

Overall

  825

Financial Instruments

825-10

Overall

825-20

Registration Payment Arrangements

  830

Foreign Currency Matters

830-10

Overall

830-20

Foreign Currency Transactions

830-30

Translation of Financial Statements

830-230

Statement of Cash Flows

830-740

Income Taxes

  835

Interest

835-10

Overall

835-20

Capitalization of Interest

835-30

Imputation of Interest

  840

Leases

840-10

Overall

840-20

Operating Leases

840-30

Capital Leases

840-40

Sale-Leaseback Transactions

  845

Nonmonetary Transactions

845-10

Overall

  850

Related-Party Disclosures

850-10

Overall

  852

Reorganizations

852-10

Overall

852-20

Quasi-Reorganizations

852-740

Income Taxes

  853

Service Concession Arrangements

853-10

Overall

  855

Subsequent Events

855-10

Overall

  860

Transfers and Servicing

860-10

Overall

860-20

Sales of Financial Assets

860-30

Secured Borrowings and Collateral

860-40

Transfers to Qualifying Special-Purpose Entities

860-50

Servicing Assets and Liabilities

IV. Industry/Unique Topics

  905

Agriculture

905-10

Overall

  908

Airlines

908-10

Overall

  910

Contractors—Construction

910-10

Overall

910-20

Contract Costs

  912

Contractors—Federal Government

912-10

Overall

912-20

Contract Costs

  915

Development Stage Entities

915-10

Overall

  920

Entertainment—Broadcasters

920-10

Overall

  922

Entertainment—Cable Television

922-10

Overall

  924

Entertainment—Casinos

924-10

Overall

  926

Entertainment—Films

926-10

Overall

926-20

Other Assets—Film Costs

  928

Entertainment—Music

928-10

Overall

  930

Extractive Activities—Mining

930-10

Overall

  932

Extractive Activities—Oil and Gas

932-10

Overall

  940

Financial Services—Brokers and Dealers

940-10

Overall

940-20

Broker Dealer Activities

  942

Financial Services—Depository and Lending

942-10

Overall

  944

Financial Services—Insurance

944-10

Overall

944-20

Insurance Activities

944-30

Acquisition Costs

944-40

Claim Costs and Liabilities for Future Policy Benefits

944-50

Policyholder Dividends

944-60

Premium Deficiency and Loss Recognition

944-80

Separate Accounts

  946

Financial Services—Investment Companies

946-10

Overall

946-20

Investment Company Activities

  948

Financial Services—Mortgage Banking

948-10

Overall

  950

Financial Services—Title Plant

  952

Franchisors

952-10

Overall

  954

Health Care Entities

954-10

Overall

  958

Not-for-Profit Entities

958-10

Overall

958-20

Financially Interrelated Entities

958-30

Split-Interest Arrangements

  960

Plan Accounting—Defined Benefit Pension Plans

960-10

Overall

960-20

Accumulated Plan Benefits

960-30

Net Assets Available for Plan Benefits

960-40

Terminating Plans

  962

Plan Accounting—Defined Contribution Pension Plans

962-10

Overall

962-40

Terminating Plans

  965

Plan Accounting—Health and Welfare Benefit Plans

965-10

Overall

965-20

Net Assets Available for Plan Benefits

965-30

Plan Benefits Obligations

965-40

Terminating Plans

  970

Real Estate—General

970-10

Overall

  972

Real Estate—Common Interest Realty Associations

972-10

Overall

  974

Real Estate—Real Estate Investment Trusts

974-10

Overall

  976

Real Estate—Retail Land

976-10

Overall

  978

Real Estate—Time-Sharing Activities

978-10

Overall

  980

Regulated Operations

980-10

Overall

980-20

Discontinuation of Rate-Regulated Accounting

  985

Software

985-10

Overall

985-20

Costs of Software to Be Sold, Leased, or Marketed

  995

U.S. Steamship Entities

V. Glossary

1

ASU 2014-09 added this Codification section.

1ASC 105 Generally Accepted Accounting Principles

Perspectives and Issues

What Is GAAP?

Nonauthoritative Sources

Recognition Principles

Disclosure Principles

Definitions of Terms

Concepts, Rules, and Examples

History of GAAP

Other Sources

GAAP Codification

SEC Guidance in the Codification

Standards-Setting Process

Emerging Issues Task Force

Accounting Standards Updates

Maintenance Updates

American Institute of Certified Public Accountants

Researching GAAP Problems

Codification Structure

Research Procedures

Step 1: Identify the Problem

Step 2: Analyze the Problem

Step 3: Refine the Problem Statement

Step 4: Identify Plausible Alternatives

Step 5: Develop a Research Strategy

Step 6: Search Authoritative Literature (Described in Additional Detail Below)

Step 7: Evaluation of the Information Obtained

Search Authoritative Literature (Step 6)—Further Explanation

Researching

Wiley GAAP

Researching Nonpromulgated GAAP

Internet-Based Research Sources

The Concept of Materiality

Technical Alert

Descriptions of Materiality

Quantitative Factors

Qualitative Factors

Degree of Precision

The Conceptual Framework

Components of the Conceptual Framework

CON 8—Chapter 1: The Objective of General Purpose Financial Reporting

CON 8—Chapter 3: Qualitative Characteristics of Useful Financial Information

CON 5: Recognition and Measurement in Financial Statements of Business Enterprises

CON 6: Elements of Financial Statements

Definitions of terms

Elements of Not-For-Profit Financial Statements

CON 7: Using Cash Flow Information and Present Value in Accounting Measurements

How CON 7 Measures Differ from Previously Utilized Present Value Techniques

Measuring Liabilities

Interest Method of Allocation

Accounting for Changes in Expected Cash Flows

Application of Present Value Tables and Formulas

Example of a Present Value Calculation

Example of an Annuity Present Value Calculation

Example of the Relevance of Present Values

Practical Matters

Perspectives and Issues

What Is GAAP?

The FASB Accounting Standards Codification™ (ASC) is the:

…source of authoritative generally accepted accounting principles (GAAP) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (SEC) under authority of federal securities laws are also sources of a uthoritative GAAP for SEC registrants. In addition to the SEC's rules and interpretive releases, the SEC staff issues Staff Accounting Bulletins that represent practices followed by the staff in administering SEC disclosure requirements, and it utilizes SEC Staff Announcements and Observer comments made at Emerging Issues Task Force meetings to publicly announce its views on certain accounting issues for SEC registrants. ASC 105-10-05-1

In the absence of authoritative guidance, the FASB Codification (the Codification) offers the following approach:

If the guidance for a transaction or event is not specified within a source of authoritative GAAP for that entity, an entity shall first consider accounting principles for similar transactions or events within a source of authoritative GAAP for that entity and then consider nonauthoritative guidance from other sources. An entity shall not follow the accounting treatment specified in accounting guidance for similar transactions or events in cases in which those accounting principles either prohibit the application of the accounting treatment to the particular transaction or event or indicate that the accounting treatment should not be applied by analogy. ASC 105-10-05-2

Nonauthoritative Sources

The Codification lists some possible nonauthoritative sources:

Practices that are widely recognized and prevalent either generally or in the industry,

FASB Concepts Statements,

American Institute of Certified Public Accountants (AICPA) Issues Papers,

International Financial Reporting Standards of the International Accounting Standards Board,

Pronouncements of professional associations or regulatory agencies,

Technical Information Service Inquiries and Replies included in AICPA Technical Practice Aids,

Accounting textbooks, handbooks, and articles.

(ASC 105-10-05-3)

GAAP establishes:

The measurement of economic activity,

The time when such measurements are to be made and recorded,

The disclosures surrounding this activity, and

The preparation and presentation of summarized economic information in the form of financial statements.

GAAP develops when questions arise about how best to accomplish those items. In response to those questions, GAAP is either prescribed in official pronouncements of authoritative bodies empowered to create it, or it originates over time through the development of customary practices that evolve when authoritative bodies fail to respond. Thus, GAAP is a reaction to and a product of the economic environment in which it develops. As such, the development of accounting and financial reporting standards has lagged the development and creation of increasingly intricate economic structures and transactions.

There are two broad categories of accounting principles—recognition and disclosure.

Recognition Principles

Recognition principles determine the timing and measurement of items that enter the accounting cycle and impact the financial statements. These are reflected in quantitative standards that require economic information to be reflected numerically.

Disclosure Principles

Disclosure principles deal with factors that are not always quantifiable. Disclosures involve qualitative information that is an essential ingredient of a full set of financial statements. Their absence would make the financial statements misleading by omitting information relevant to the decision-making needs of the reader. Disclosure principles also complement recognition principles by dictating that disclosures

expand on some quantitative data,

explain assumptions underlying the numerical information, and

provide additional information on accounting policies, contingencies, uncertainties, etc., which are essential to fully understand the performance and financial condition of the reporting enterprise.

Definitions of Terms

See Appendix A, Definitions of Terms, for terms related to this topic: Conduit Debt Securities, Financial Statements Are Available to Be Issued, Nongovernmental Entity, Nonpublic Entity, Not-for-Profit Entity, and Public Business Entity.

Concepts, Rules, and Examples

History of GAAP

From time to time, the bodies given responsibility for the promulgation of GAAP have changed, and indeed more than a single such body has often shared this responsibility. In response to the stock market crash of 1929, the AICPA appointed the Committee on Accounting Procedure. This was superseded in 1959 by the Accounting Principles Board (APB) created by the AICPA. Because of operational problems, in 1972 the profession replaced the APB with a three-part organization consisting of the Financial Accounting Foundation (FAF), Financial Accounting Standards Board (FASB), and the Financial Accounting Standards Advisory Council (FASAC). Since 1973 the FASB has been the organization designated to establish standards of financial reporting.

Other Sources

Not all GAAP has resulted from the issuance of pronouncements by authoritative bodies. For example, depreciation methods such as straight-line and declining balance have long been accepted. There are, however, no definitive pronouncements that can be found to state this. Furthermore, there are many disclosure principles that evolved into general accounting practice because they were originally required by the SEC in documents submitted to them. Much of the content of statements of financial position and income statements has evolved over the years in the absence of adopted standards.

GAAP Codification

In 2009, FASB's Codification became the single official source of authoritative, nongovernmental U.S. generally accepted accounting principles. It superseded all nongrandfathered (see ASC 105-10-70-2 for a list of grandfathered guidance), non-SEC accounting guidance. Only one level of authoritative GAAP exists, excluding the guidance issued by the Securities and Exchange Commission (SEC). All other literature is nonauthoritative.

SEC Guidance in the Codification

To increase the utility of the Codification for public companies, relevant portions of authoritative content issued by the SEC and selected SEC staff interpretations and administrative guidance are included for reference in the Codification. The sources include:

Regulation S-X,

Financial Reporting Releases (FRR)/Accounting Series Releases (ASR),

Interpretive Releases (IR), and

SEC staff guidance in:

Staff Accounting Bulletins (SAB),

EITF Topic D and SEC Staff Observer comments.

The Codification does not, however, incorporate the entire population of SEC rules, regulations, interpretive releases, and staff guidance. SEC guidance not incorporated in the codification includes content related to auditing or independence matters or matters outside of the basic financial statements, including Management's Discussion and Analysis (MD&A).

Standards-Setting Process

The FASB has long adhered to rigorous “due process” when creating new guidance. The goal is to involve constituents who would be affected by the newly issued guidance so that the standards created will result in information that reports economic activity as objectively as possible without attempting to influence behavior in any particular direction. Ultimately, however, the guidance is the judgment of the FASB, based on research, public input, and deliberation.

The Board issues guidance through Accounting Standards Updates (ASU) which describe amendments to the Accounting Standards Codification. Once issued, the provisions become GAAP after the stated effective date.

Emerging Issues Task Force

The Emerging Issues Task Force (EITF) was formed in 1984 by the FASB to assist the Board in identifying current or emerging issues and implementation problems before divergent practices become entrenched. The guidance provided has often been restricted to narrow issues that were of immediate interest and importance.

If an EITF consensus is approved by the FASB, it amends the FASB Codification through an ASU.

Accounting Standards Updates

Accounting Standards Updates (ASUs) are composed of:

A summary of the key provisions of the project that led to the changes,

The specific changes to the Codification, and

The Basis for Conclusions.

The title of the combined set of new guidance and instructions is Accounting Standards Update YY-XX, where YY is the last two digits of the year and XX is the sequential number for each update. All authoritative GAAP issued by the FASB is issued in this format.

The FASB organizes the content of ASUs using the same Section headings as those used in the Codification. ASUs are not deemed authoritative in their own right; instead, they serve only to update the Codification and provide the historical basis for conclusions.

The content from updates that is not yet fully effective for all reporting entities appears in the Codification as boxed text and is labeled “pending content.” The pending content text box includes the earliest transition date and a link to the related transition guidance, also found in the Codification.

Maintenance Updates

As with any publishing practice, irregularities occur. To make necessary corrections, the FASB staff issues Maintenance Updates. These are not addressed by the Board and contain nonsubstantive editorial changes and link-related changes.

American Institute of Certified Public Accountants

Although it currently plays a greatly reduced standard-setting role, the American Institute of Certified Public Accountants (AICPA) has authorized the Financial Reporting Executive Committee (FinREC) to determine the AICPA's p olicies on financial reporting standards and to speak for the AICPA on accounting matters. FinREC, formerly the Accounting Standards Executive Committee (AcSEC), is the senior technical committee at the AICPA. It is composed of seventeen volunteer members, representative of industry, analysts, and both national and regional public accounting firms.

Researching GAAP Problems

These procedures should be refined and adapted to each individual fact situation.

Codification Structure

The FASB Codification is located on fasb.org. The site is intended to be easily searchable for research purposes. This section provides an overview of the site's contents and search functionality.

Areas. On all pages of the site, all categories of the Codification are listed down the vertical menu bar on the left side of the page, revealing the following Areas, and the numbering series for each one:

General Principles (100). (Establishes the Codification as the source of GAAP.)

Presentation (200). (Topics in this area relate only to presentation matters; they do not address recognition, measurement, and derecognition matters. Examples of these topics are income statement, balance sheet, and earnings per share.)

Assets (300).

Liabilities (400).

Equity (500).

Revenue (600).

Expenses (700). (Clusters all types of expense-related GAAP into five broad categories, which are cost of goods sold, research and development, compensation, income taxes, and other expenses.)

Broad Transactions (800). (Contains the major transactional topics, such as business combinations, derivatives, and foreign currency matters.)

Industry (900). (Itemizes GAAP for specific industries, such as entertainment, real estate, and software.)

Master Glossary.

Topics. The Codification content is arranged by Area and then further divided by Topics, Subtopics, Sections, and Subsections. FASB has developed a classification system specifically for the Codification. The following is the structure of the classifications system: XXX-YY-ZZ-PP, where:

XXX = topic,

YY = subtopic,

ZZ = section, and

PP = paragraph.

An “S” preceding the section number denotes SEC guidance. At the most granular level of detail, the Codification has a two-digit numerical code for a standard set of categories.

The Codification Taxonomy can be found in the section that precedes Chapter 1.

Subtopics. Subtopics represent subsets of a topic and are typically identified by type or by scope. For example, lessees and lessors are two separate subtopics of leases Topic 842. Each topic contains an “overall subtopic” (designated “-10”) that generally represents the pervasive guidance for the topic, which includes guidance that applies to all other subtopics. Each a dditional subtopic represents incremental or unique guidance not contained in the overall subtopic.

Sections

Title

Number

Description

Status

00

Includes references to the Accounting Standards Updates that affect the subtopic.

Overview and background

05

Provides overview and background material.

Objectives

10

States the high-level objectives of the topic.

Scope and scope exceptions

15

Outlines the transactions, events, and other occurrences to which the subtopic guidance does or does not apply.

Glossary

20

Contains definitions for terms found within the subtopic guidance.

Recognition

25

Defines the criteria, timing, and location for recording an item in the financial statements.

Initial measurement

30

Provides guidance on the criteria and amounts used to measure a transaction at the initial date of recognition.

Subsequent measurement