Accounting Standards Codification (ASC)

• What does the Accounting Standards Codification (ASC) ensure?

  Consistent financial accounting rules
• Before the ASC, accounting rules were unified in a single resource.

  False
• Match the feature with its description:

  Structure ↔️ Comprehensive and organized

  Updates ↔️ Continuously updated by FASB

  Usefulness ↔️ Central resource for accounting standards
• Steps to understand the structure of the Accounting Standards Codification (ASC):

  1️⃣ Topics

  2️⃣ Subtopics

  3️⃣ Sections

  4️⃣ Paragraphs
• What is an example of a topic within the ASC?

  Revenue Recognition
• What tool in the ASC helps users find specific standards using keywords?

  Index
• What topic would you find lease-related standards under in the ASC?

  Topic 842
• What does the Revenue Recognition topic in the ASC address?

  Recording revenue from contracts
• Match the topic with its description:

  Financial Instruments ↔️ Rules for reporting financial assets

  Income Taxes ↔️ Guidelines for income tax accounting

  Inventory ↔️ Regulations for valuing inventory
• What paragraph in the ASC addresses revenue measurement under Topic 606?

  606-10-15
• Steps to apply the ASC to specific accounting situations:

  1️⃣ Identify the relevant topic and section

  2️⃣ Understand the standards

  3️⃣ Apply the standards to the issue
• Which organization is responsible for establishing and updating the ASC?

  FASB
• Match the update source with its description:

  FASB Update Email ↔️ Direct notifications of changes

  FASB Publications ↔️ Comprehensive guides and summaries

  AICPA Website ↔️ Articles and updates from professionals