FASB Codification
Unit 2 Case Study
Access the FASB Codification and prepare responses to the following questions, providing Codification references as support for your answers.
1. Access the glossary and give the definition for:
a. Firm Fixed-Price Contract
This is a contract of the price which allows it not be subject to adjustment as a result of the performance provided as outlined in the contract. What was outlined in the contract is what will be the cost. There cannot be any hidden fees added once the contract has been given and signed UNLESS stipulated in the contract (FASB, 2014).
b. Amortized Cost
This is the initial investment sum, minus the collected cash, minus any write-offs and plus any yields accreted to date. This will reflect a sale of an asset that has been depreciated to date. (FASB, 2014).
c. Impairment
This is the condition that is a result of when a long term asset exceeds its fair value, or an overpriced asset (FASB, 2014).
2. Are there SEC documents as a part of this Codification? If yes, where are they located? Do all firms need to follow this SEC guidance? If not, which companies do not have to follow this SEC guidance?
Yes, there is a help section on SEC Content which explains that the Codification includes guidance that have been issued by both FASB and the SEC. Throughout the Codification, the SEC and FASB will provide guidance, but will do so in separate ways. The SEC will have sections labeled with a two digit section number and title, different from the S that follows FASB sections.
Guidance is issued by the SEC, that relate to Financial Accounting and Reporting only and is provided as a means of convenience to users. The sections for the SEC do not include all the regulations or guidance and can be hidden when searching topics.
The SEC does not require all businesses to follow the guidance. If you are a privately owned company, by law, you are one of these that can be excluded.
Resource
(2014). FASB Accounting
Access the FASB Codification and prepare responses to the following questions, providing Codification references as support for your answers.
1. Access the glossary and give the definition for:
a. Firm Fixed-Price Contract
This is a contract of the price which allows it not be subject to adjustment as a result of the performance provided as outlined in the contract. What was outlined in the contract is what will be the cost. There cannot be any hidden fees added once the contract has been given and signed UNLESS stipulated in the contract (FASB, 2014).
b. Amortized Cost
This is the initial investment sum, minus the collected cash, minus any write-offs and plus any yields accreted to date. This will reflect a sale of an asset that has been depreciated to date. (FASB, 2014).
c. Impairment
This is the condition that is a result of when a long term asset exceeds its fair value, or an overpriced asset (FASB, 2014).
2. Are there SEC documents as a part of this Codification? If yes, where are they located? Do all firms need to follow this SEC guidance? If not, which companies do not have to follow this SEC guidance?
Yes, there is a help section on SEC Content which explains that the Codification includes guidance that have been issued by both FASB and the SEC. Throughout the Codification, the SEC and FASB will provide guidance, but will do so in separate ways. The SEC will have sections labeled with a two digit section number and title, different from the S that follows FASB sections.
Guidance is issued by the SEC, that relate to Financial Accounting and Reporting only and is provided as a means of convenience to users. The sections for the SEC do not include all the regulations or guidance and can be hidden when searching topics.
The SEC does not require all businesses to follow the guidance. If you are a privately owned company, by law, you are one of these that can be excluded.
Resource
(2014). FASB Accounting