FASB Accounting Standards Codification

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The FASB Accounting Standards Codification (FASB Codification) is the only source of authoritative GAAP apart from SEC issued rules and regulations that apply only to SEC registrants. The FASB issues an Accounting Standards Update to inform people about changes to the FASB Codification, which includes changes to non-authoritative SEC content. In relation to International Financial Reporting Standards (IFRS), after a new IFRS Standard is issued and before it becomes effective, the International Accounting Standards Board (IASB) helps stakeholders to understand the new Standard's principles very well. The activities of the board promote greater consistency in stakeholders' understanding of new Standards as the practice develops, which supports…show more content…
FASB There is also the update of Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting. This update is issued by the board to give clarity and lessen the variety in practice and the complication when the guidance in topic 718 is applied. An entity may alter the terms of a share-based payment award for a lot of diverse reasons, and the effect of the change can significantly differ. The FASB defines term modification currently as “a change in any of the terms or conditions of a share-based payment award.”
Stakeholders noticed that the meaning of the term modification is broad and different entities interpreted it their own way. Some entities assess if a change to the terms of an award is substantive. When the entities finalize that an alteration substantive, they then use modification accounting in Topic 718. On the other hand, when they conclude that a change is not substantive, they do not use modification accounting. Topic 718 does not specify or accommodate guidance about what type of changes are substantive. Other entities also apply modification accounting for changes to an award, with the exception of changes they consider to be fully administrative in nature. Nevertheless, Topic 718 does not give guidance about what changes are supposed
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The Board is completing an update to the Conceptual Framework for Financial Reporting in order to give it a more complete, concise and updated set of concepts to use when the Board develops or revises IFRS Standards. The Conceptual Framework for Financial Reporting describes the basic concepts and objectives of general purpose financial reporting. It underlies the preparation and presentation of financial statements for external parties. It is an empirical tool that helps the International Accounting Standards Board (IASB) develop requirements in IFRS Standards which is based on clear and regular principles (ifrs, 2018). These principles, on the other hand, must bring about the Board developing IFRS Standards that makes it necessary for entities to present more important, comparable and clear information in financial statements.
The reason why the board decided to revise the Conceptual Framework is because, some vital issues are not discussed, some of the guidance is unsettled and is outdated. For instance, the Conceptual Framework provides a small guidance on measurement or presentation and disclosure, and it is debatable the kind of role uncertainty should play in making decisions about recognition and
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