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For the Codification Research System

Professional View

October 26, 2015

Financial Accounting Standards Board

of the Financial Accounting Foundation

Acknowledgements

Bruce Pounder, CMA, CFM, DipIFR (ACCA), was the lead contributor for the Lessons included in the FASB Learning Guide For the Codification Research System. Special thanks to Karen Guasp of the FASB, Mary Nassef of the FAF, and numerous other FASB and FAF staff members for their editorial contributions.

Copyright © 2015 by Financial Accounting Foundation, Norwalk, Connecticut. All rights reserved.

This publication is for informational purposes only and the content herein is not a substitute for legal, accounting or other professional advice. As such, users should not rely on this publication for instruction, opinions, guidance, advice, or strategies on the interpretation or application of accounting or accounting standards of the Financial Accounting Standard Boards, specifically or generally, and should always consult his or her own professional advisors and discuss the facts and circumstances that apply to the user. While every effort has been made to make the information presented here as complete and accurate as possible, it may contain errors, omissions or misinformation. Neither Financial Accounting Foundation nor the Financial Accounting Standard Boards accepts any liability or responsibility to any person or entity with respect to any loss or damage alleged to have been caused, directly or indirectly, by the information, ideas, opinions or other content in this publication. If you do not agree to these terms, you should not use, consult or refer to this publication.

Table of Contents i

Table of Contents Click on any section title listed below to go directly to the section. To return to the table of contents from that section, right click and select “Previous View.” You may also use the keyboard shortcut “Alt+Left Arrow” to return to the previous view.

Getting the Most Out of This Guide ................................................................ v-vi PART I: Core Skills Lesson 1: Getting Started with the Codification ........................................... 1-10 Recognizing When to Consult the System .............................................................1

Logging In ..............................................................................................................3

How the Codification Content is Organized ..........................................................5

How to Navigate through the Codification Content ..............................................6

How to Find Relevant Guidance by Systematically Browsing the

Codification Content ............................................................................................7

Logging Out ...........................................................................................................8

Lesson 2: Navigating the Codification ......................................................... 11-21 Identifying Relevant Areas ..................................................................................12

Identifying Relevant Topics .................................................................................12

Identifying Relevant Subtopics ............................................................................16

Assembling All Sections within a Subtopic.........................................................18

Lesson 3: Working with Section-Level Content .......................................... 22-34 Identifying Relevant Sections ..............................................................................23

Finding and Distinguishing between FASB Guidance and SEC Guidance .........26

Systematically Browsing Content within Sections ..............................................28

How Content Is Organized within Each Section .................................................29

FASB versus SEC Content within Sections .........................................................30

System Features Available Only at Individual Section Pages .............................30

Table of Contents ii

Lesson 4: Understanding the Scope of Guidance ........................................ 35-43 Recognizing Where Scope Information is Located .............................................36

Navigating among Sections within a Subtopic ....................................................37

Comprehending Scope Information .....................................................................38

Lesson 5: Citing Codification Content ......................................................... 44-58 Elements of Codification Citations ......................................................................45

Citation Styles ......................................................................................................48

Navigating to Cited Content ................................................................................54

Lesson 6: Working with Research Results .................................................. 59-70 Printing Codification Content ..............................................................................59

Copying Codification Content to Paste Elsewhere ..............................................61

Emailing Links to Codification Sections .............................................................62

Annotating Paragraphs in the System ..................................................................64

PART II: Skills for Working with Different Types of Content Lesson 7: Working with Pending Content ................................................... 71-76 About Pending Content ........................................................................................72

Accessing Transition Guidance ...........................................................................73

Comprehending Transition Guidance ..................................................................73

Lesson 8: Working with the Pending Content System ............................... 77-90 About the Pending Content System .....................................................................78

Setting System Profile Preferences ......................................................................78

Special Cases .......................................................................................................80

Set Pending Content Profile Information – First Screen .....................................81

Options for Early Adoption – Second Screen ......................................................82

PCS Integration Status – Third Screen ................................................................83

Searching While the PCS is Enabled ...................................................................87

System Limitations ..............................................................................................87

Lesson 9: Working with Archived Content ................................................. 91-97 About Archived Content ......................................................................................91

Table of Contents iii

Accessing Archived Content................................................................................93

Understanding Archived Content ........................................................................95

Lesson 10: Working with Glossaries .......................................................... 98-106 Accessing Definitions of Glossary Terms ...........................................................98

About Pending and Archived Glossary Term Definitions .................................102

Working with Glossary Term Definitions .........................................................103

Lesson 11: Working with Nonauthoritative Content ............................. 107-115 About Nonauthoritative Content ........................................................................107

Consulting Nonauthoritative Content ................................................................109

Accessing Nonauthoritative Content .................................................................110

PART III: Skills for Simple and Advanced Searching Lesson 12: Searching: Fundamental Techniques ................................... 116-126 Searching versus Systematic Browsing .............................................................117

Performing a Simple Search ..............................................................................117

Reviewing Search Results—Authoritative Codification Content ......................119

Reviewing Search Results—Sources of Nonauthoritative Content ...................123

Lesson 13: Searching: Advanced Techniques ......................................... 127-139 Performing an Advanced Search .......................................................................128

Using the “Refine Search” Feature ....................................................................133

Using the “Narrow” Feature ..............................................................................133

PART IV: Skills for Special Situations Lesson 14: Keeping Track of Changes to the Codification .................... 140-146 How the Codification is Updated .......................................................................141

Working with Status Sections ............................................................................141

Using the “Recently Issued” Feature .................................................................142

Using “Related Exposure Draft” Links ..............................................................143

Lesson 15: Cross Referencing Codification Content and Its Sources ... 147-157 Background on Cross Referencing ....................................................................148

Table of Contents iv

Identifying Sources of Codification Content .....................................................149

Identifying Where Source Content is Located in the Codification ....................152

Printing Codification Content with Sources ......................................................154

Lesson 16: Assembling Content for Greater Efficiency ......................... 158-166 Using the “Combine Subsections” Feature ........................................................158

Using the “JOIN SECTIONS” Feature ..............................................................160

Using the “JOIN ALL SUBTOPICS” Feature...................................................163

Lesson 17: Working with XBRL Elements .............................................. 167-175 Background on XBRL .......................................................................................167

The U.S. GAAP Financial Reporting Taxonomy (UGT) ..................................169

Identifying XBRL Elements That are Linked to a Subtopic ..............................170

Identifying XBRL Elements That are Linked to a Paragraph or

Glossary Term ..................................................................................................171

Identifying Paragraphs and/or Glossary Terms to Which an XBRL

Element Is Linked ............................................................................................173

Lesson 18: Providing Feedback on the Codification .............................. 176-184 Using the System’s Feedback Features ..............................................................176

Submitting Feedback on Specific Content .........................................................177

Submitting General Feedback ............................................................................180

Appendix A: Answer Key .......................................................................... 185-205

Getting the Most Out of This Guide v

Getting the Most Out of This Guide READ THIS FIRST

Introduction

Welcome to the FASB Learning Guide for the Codification Research System. The FASB Accounting Standards Codification® (hereafter referred to as the Codification) is the source of authoritative generally accepted accounting principles (GAAP) recognized by the FASB to be applied by nongovernmental entities in the United States. The FASB’s Codification Research System (hereafter referred to as the System) provides access to the Codification content. The purpose of this Learning Guide is to help you acquire the knowledge, skills, and abilities that you will need in order to use the System effectively and efficiently.

This Learning Guide was written for anyone who:

 Must research authoritative financial accounting and reporting standards applicable to nongovernmental entities in the United States, as documented in the Codification; and

 Intends to use the “Professional View” of the System in performing such research. (Many of the features discussed in this guide are not included in the “Basic View”.)

The emphasis in this Learning Guide is on “learning by doing.” Be prepared to practice what you are learning as you read about it.

Using This Guide

This Learning Guide is organized into 17 lessons. It may be useful to work the lessons in sequence because each lesson builds progressively on the ones before it. If you have a specific area that you have questions on, the table of contents provides links to the appropriate lessons.

The structure explained below is the same across all lessons. It has been designed to maximize your learning.

 Each lesson begins with a Lesson Scenario that “sets the stage” for your learning. Each scenario is a very short story about someone using the System in a typical work situation. Reading the Lesson Scenario first will prepare you for what the lesson will help you learn to do. You will also gain a sense of the real-world relevance of the lesson and how your learning will benefit you in

Getting the Most Out of This Guide vi

your work. Disclaimer: Any research answers provided in the answer key are not intended to represent guidance on GAAP or all of the sources of authoritative guidance for the particular scenario; they are illustrative in nature.

 Learning Outcomes are listed following each Lesson Scenario. Learning Outcomes are the specific work-related tasks that the lesson will help you learn to do. Your objective should be to achieve the Learning Outcomes by the end of the lesson.

 The instructional content within each lesson is based directly on the Learning Outcomes. It is in this portion of each lesson that you will learn what to do, why, when, and how.

 As you work through the instructional content, you will notice sidebars— various supplementary items appearing in the page margins. Pay particular attention to sidebars labeled Look Now and Try It Now and always do what they prompt you to do.

 Also appearing throughout the instructional content are Tip for Success boxes that contain very important advice for using the System.

 Following the instructional content in each lesson you will find a Lesson Summary—a “bullet list” of the lesson’s key points. Reviewing the Lesson Summary will help you gauge the extent of your learning before undertaking activities that will reinforce it.

 The final portion of each lesson is titled Reinforce Your Learning. It consists of questions, exercises, and problems for you to work through to improve your understanding and retention of what you have learned. Do not skip these items. The results of your performance on these end-of-lesson activities are the best indicator of whether or not you are ready to move on to the next lesson. The answer key for this portion of the lesson is found in Appendix A.

Navigating through the Learning Guide PDF Online You may click on any section title listed in the Learning Guide table of contents to go directly to the section. To return to the table of contents from that section, right click and select “Previous View.” You may also use the keyboard shortcut “Alt+Left Arrow” to return to the previous view.

Notice

Specific Codification content and specific System features that appear in this Learning Guide may have changed since this Learning Guide was published. Such changes may affect the examples, illustrations, questions, exercises, and problems herein.

Sidebars A sidebar looks like this. Be sure to read the ones that appear in the lessons of this Learning Guide.

Lesson 1: Getting Started with the Codification 1

Getting Started with the Codification LESSON

1 Lesson Scenario

Angela is an accountant who works for a manufacturing company. She just received an email from her boss, Barry, who wants her to meet with him to discuss “writing down” the carrying value of certain inventory items. Angela is not familiar with the authoritative accounting guidance for inventory write-downs, so she prepares for her meeting with Barry by consulting the Codification.

Angela logs in to the System and proceeds to navigate through the various levels of the Codification content. She goes first to the Assets Area, then within that Area to the Inventory Topic, and then within that Topic to the Overall Subtopic. Finally, she goes to the Subsequent Measurement Section of that Subtopic and begins reading about the circumstances under which U.S. GAAP requires accounting adjustments to reduce the recorded dollar value of inventory on-hand. After reviewing that Section, Angela logs out of the System, ready for her meeting with Barry.

Learning Outcomes

In the scenario above, Angela used the System to find the provisions of U.S. GAAP related to a particular aspect of financial accounting. This lesson will help you learn to do what Angela did, specifically:

 Recognize when to consult the System  Log in to the System  Find relevant accounting guidance by systematically browsing the Codification

content

 Log out of the System.

RECOGNIZING WHEN TO CONSULT THE SYSTEM

The System provides access to a large amount of diverse information. Understanding what information is and is not available through the System will help you to save time by consulting the appropriate sources of information to answer your research questions.

Lesson 1: Getting Started with the Codification 2

The System provides access to the content of the Codification. Here are key things to remember about the Codification content that will help you know when it is appropriate to consult it:

 The Codification contains only accounting guidance, not auditing, tax preparation, or other kinds of guidance.

 The Codification contains only authoritative guidance. Nonauthoritative guidance is not included in the Codification content itself, although certain sources of nonauthoritative guidance are available through the System (see below).

 The Codification is applicable only to U.S. entities. It does not contain GAAP for other countries or International Financial Reporting Standards (IFRS).

 The Codification is the source of authoritative U.S. GAAP recognized by the FASB to be applied to nongovernmental entities. It does not contain guidance for governmental entities.

 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 have been included for reference in the Codification, such as:

a. Regulation S-X (SX) b. Financial Reporting Releases (FRR)/Accounting Series Releases (ASR) c. Interpretive Releases (IR) d. SEC Staff guidance in:

1. Staff Accounting Bulletins (SAB) 2. EITF Topic D and SEC Staff Observer comments.

 The SEC Sections do not contain the entire population of SEC rules, regulations, interpretive releases, and staff guidance. For example, the Codification does not include all content related to matters outside the basic financial statements, such as Management’s Discussion and Analysis (MD&A), or to auditing or independence matters.

 The Codification content includes examples and implementation guidance.

 The System also provides access to certain nonauthoritative sources of information:

a. About the Codification b. Accounting Standards Updates c. Proposed Accounting Standards Updates d. Other Exposure Documents e. Pre-Codification Standards

FASB vs. SEC Guidance Lesson 3 of this Learning Guide explains how FASB guidance and SEC guidance are distinguished from each other in the Codification.

Other Sources Lesson 11 of this Learning Guide describes each of these nonauthoritative sources of information.

Lesson 1: Getting Started with the Codification 3

f. Concepts Statements g. Maintenance Updates.

 The Codification is not a textbook or tutorial on accounting. It is assumed that users possess basic knowledge of double-entry accounting techniques and the principal financial statements.

LOGGING IN

To use the System, you must have a user account and access to the internet. Instructions for obtaining a user account can be found at http://asc.fasb.org.

This Learning Guide assumes that you have “Professional View” access to the System, either through a paid subscription or through the American Accounting Association’s Academic Accounting Access initiative.

Your user account is identified by your email address, which serves as your username when logging into the System. You will also be asked to choose a password for your account.

Once you have established your user account, you must enter your username and password at the System’s login page in order to use the System, as shown in the following screen image.

To Log In to the System:

 Using a web browser (for example, Microsoft Internet Explorer), go to https://asc.fasb.org.

 Click the “Login” link in the upper right-hand corner of the page.  Enter your username and password (passwords are case-sensitive), then click the

SUBMIT button.

 Try It Now Go ahead and log in to the System using your username and password.

Lesson 1: Getting Started with the Codification 4

 Verify that your web browser is displaying the home page of the System, as

shown in the following screen image.

Lesson 1: Getting Started with the Codification 5

FINDING RELEVANT ACCOUNTING GUIDANCE BY SYSTEMATIC BROWSING

A simple and direct way to find the provisions of U.S. GAAP related to a particular aspect of financial accounting is to systematically browse the Codification content. To do so effectively and efficiently, you will need to know how the Codification content is organized and how to navigate through the content in the System.

How the Codification Content is Organized

The Codification content is organized by subject matter in a hierarchy.

The Codification’s hierarchy can be visualized as an “outline” structure, as the four highest levels are shown here:

Area Topic Subtopic Section

In this hierarchical structure, Areas represent large collections of accounting guidance. Topics, Subtopics, and Sections represent increasingly smaller collections of guidance within Areas.

Each of the Codification’s nine Areas is identified by a title. Each Topic, Subtopic, and Section has a numeric identifier as well as a title. For example, the Area, Assets, contains multiple Topics, including Topic 330, Inventory, which contains multiple Subtopics, including Subtopic 10, Overall, which contains multiple Sections, including Section 35, Subsequent Measurement.

Areas The Codification’s nine Areas are • General Principles • Presentation • Assets • Liabilities • Equity • Revenue • Expenses • Broad Transactions • Industry

 TIP FOR SUCCESS: Focus on Sections The Codification is the source of authoritative U.S. GAAP recognized by the FASB to be applied by nongovernmental entities. If the answers to your research questions are in the Codification, you will find them in one or more of the Codification’s Sections. The higher levels in the Codification’s hierarchical structure exist merely to contain and organize the Section-level content and do not add anything to what is in the Sections. So when using the System, you should focus on identifying the specific Section or Sections that are relevant to the research questions you are trying to answer. For example, the Assets Area and Inventory Topic landing pages do not contain any Codification content. Instead, the pages display tables of contents that provide links to all of the Topics in the Area and links to all of the Subtopics in the Topic, respectively.

Lesson 1: Getting Started with the Codification 6

How to Navigate through the Codification Content

In the System, each content Area, Topic, Subtopic, and Section has its own page. The pages for Areas, Topics, and Subtopics are often referred to as “landing pages.” When using the System, you can navigate through the Codification content simply by clicking links that take you to the pages you want to go to. Area, Topic, and Subtopic landing pages only contain linked tables of contents. Sections are the only pages with Codification content.

Remember that you will need to navigate to a specific Section or Sections to find answers to your research questions. You can navigate to a Section’s page from anywhere within the System in just four clicks—one click for each of the four levels of the content hierarchy at and above the Section level.

On your journey to the page for a particular Section, you will navigate through the pages for the Section’s Area, Topic, and Subtopic—in that order. Navigating through this sequence of pages is easy because each Area, Topic, and Subtopic page contains links to the pages at the next-lower level of the content hierarchy.

Area Pages: Navigating to a particular Section starts with navigating to its parent Area. Links to each of the Codification’s nine Area pages are listed on the left-hand side of every page in the System, near the top of each page.

Each Area landing page contains a list of the Topics in that Area. Both the Topic numbers and Topic titles are shown in the list of Topics. Some Areas have just one Topic; other Areas have many. Each Topic’s number and title link to the page for that Topic. You can click on any Topic number or title in the list to navigate to that Topic’s page.

Topic Pages: Each Topic landing page contains a “Table of Contents” outline, which shows how content is organized within the Topic. Immediately within the Topic are the Topic’s Subtopics; both Subtopic numbers and Subtopic titles are shown in the “Table of Contents” outline. Some Topics have just one Subtopic; other Topics have many. Each Subtopic’s number and title link to the page for that Subtopic. You can click on any Subtopic number or title in the “Table of Contents” outline to navigate to that Subtopic’s page.

Subtopic Pages: Each Subtopic landing page contains a “Table of Contents” outline, which shows the Topic to which the Subtopic belongs as well as how content is organized within the Subtopic. Immediately within the Subtopic are the Subtopic’s Sections; both Section numbers and Section titles are shown in the “Table of Contents” outline. Subtopics typically have many Sections. Each Section’s number and title link to the page for that Section. You can click on any Section number or title in the “Table of Contents” outline to navigate to that Section’s page.

Section Pages: Each Section page contains a “Table of Contents” outline, which shows the Subtopic and Topic to which the Section belongs as well as how content is organized within the Section. (Lesson 3 of this Learning Guide explains how content is organized within Sections.) The following screen image shows the Section page for Section 35, Subsequent Measurement, within Subtopic 10, Overall, within Topic 330, Inventory, within the Assets Area.

Pop-Up Menus Notice that when you move your mouse pointer over an Area link, pop-up menus of the Area’s Topics are displayed. The pop-up menus provide a fast way to navigate to Topics and Subtopics, but for now, it will be easier for you to learn about navigating through the Codification content if you click the Area link directly instead of using the pop-up menu. (Lesson 2 of this Learning Guide explains how to navigate using the pop-up menus.)