FASB Accounting Standards Codification Essay

This section deals with certain general background considerations and information related to the FASC and the answers can be found by clicking the â€Å"About the Codification† and â€Å"Notice to Constituents† sections on the FASC Welcome Page. This section is a good general source of information about the FASC and should be reviewed prior to starting to answer the specific questions set forth in all sections. The related research questions that you must answer are: (a) When did the FASC Codification become effective? †¢It was released on July 1, 2009 and became effective for Interim and Annual periods ending after September 15, 2009. (b) Did the FASC change prior GAAP? †¢No it didn’t change, it only got restructured. (c) What does the FASB expect from the new FASC structure and system? †¢The System is expected to reduce the amount of time and effort that is used to solve an accounting research issue. (d) What are the â€Å"topics† used in the ASC? †¢The General Principles †¢The Presentation †¢The Assets †¢Liabilities †¢Equity †¢Revenue †¢Expense †¢Broad Transactions †¢Industry (e) Are Securities and Exchange Commission (SEC) references included in the ASC? †¢Yes It is. 2. Transfer of Receivables FASC 860-10 As the new staff person in your company’s treasury department, you have been asked to conduct research related to a proposed transfer of receivables. Your supervisor wants the authoritative sources for the following items that are discussed in the securitization agreement. Access the FASB Codification at http://asc.fasb.org/home to conduct research using the Codification Research System to prepare responses to the following items. Provide Codification references for your responses. (a) Identify relevant Codification section that addresses transfers of receivables. †¢ 860-10-05 (b) Provide definitions for the following: (i) Transfer †¢transference of a noncash financial asset by and to someone other than the issuer of that financial asset (ii) Recourse uncollectable †¢When the transferor of receivables retains the risk of uncollectability. (iii) Collateral †¢Assets that a borrower pledges as security for a loan, which the financier seizes if the borrower seizes to pay (c) Provide other examples (besides recourse and collateral) that qualify as continuing involvement. 3. Inventories FASC 330-10 Jones Co. is in a technology-intensive industry. Recently, one of its competitors introduced a new product with technology that might render obsolete some of Jones’s inventory. The accounting staff wants to follow the appropriate authoritative literature in determining the accounting for this significant market event. Access the FASB Codification at http://asc.fasb.org/home to conduct research using the Codification Research System to prepare responses to the following items. Provide Codification references for your responses. (a) Identify the primary authoritative guidance for the accounting for inventories. †¢Accounting Research Bulletins (ARB) No.43 Chapter 4. (b) List three types of goods that are classified as inventory. †¢Goods awaiting sale (finished goods) †¢Goods in the course of production (work in process), †¢Goods to used directly or indirectly in production (raw materials and supplies) What characteristic will automatically exclude an item from being classified as inventory? †¢Long-term assets that are subject to depreciation accounting †¢Goods which, when put into use, will be so classified as depreciable Assets (c) Define â€Å"market† as used in the phrase â€Å"lower-of-cost-or-market.† †¢market means current replacement cost (by purchase or by reproduction) provided that it meet the two conditions 1.Market shall not exceed the net realizable value 2.Market shall not be less than net realizable value reduced by an allowance for an approximately normal profit margin