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Questions and Answers
What is the role of the Financial Accounting Standards Board (FASB) in relation to GAAP?
What is the role of the Financial Accounting Standards Board (FASB) in relation to GAAP?
The FASB publishes and maintains the Accounting Standards Codification (ASC), which is the single source of authoritative nongovernmental U.S. GAAP.
What is the purpose of the FASB Accounting Standards Codification?
What is the purpose of the FASB Accounting Standards Codification?
The FASB Accounting Standards Codification serves as the source of authoritative GAAP recognized by the FASB for application by nongovernmental entities.
What is GAAP and who adopts it?
What is GAAP and who adopts it?
GAAP stands for Generally Accepted Accounting Principles and it is adopted by the U.S. Securities and Exchange Commission (SEC) and used by companies based in the United States.
What are the sources of authoritative GAAP for SEC registrants?
What are the sources of authoritative GAAP for SEC registrants?
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In addition to the SEC's rules and interpretive releases, what else represents authoritative GAAP?
In addition to the SEC's rules and interpretive releases, what else represents authoritative GAAP?
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Study Notes
Financial Accounting Standards Board (FASB) and GAAP
- FASB is responsible for establishing and maintaining standards for financial accounting and reporting in the United States.
- FASB develops Generally Accepted Accounting Principles (GAAP), which provides a framework for financial reporting.
FASB Accounting Standards Codification
- The Codification organizes U.S. GAAP into an accessible format, categorizing standards by topic, subtopic, and section.
- It serves as the single source of authoritative U.S. GAAP, simplifying research and ensuring consistency in accounting practices.
Generally Accepted Accounting Principles (GAAP)
- GAAP refers to a set of accounting standards and principles used in the United States to prepare financial statements.
- Adoption of GAAP is mandatory for U.S. public companies, with additional voluntary adoption by private entities.
Sources of Authoritative GAAP for SEC Registrants
- SEC regulations and interpretive releases serve as primary authoritative sources of GAAP for companies registered with the SEC.
- FASB's Statements, Accounting Standards Updates (ASUs), and the Codification are also recognized as authoritative for SEC registrants.
Additional Authoritative GAAP
- The American Institute of Certified Public Accountants (AICPA) standards are considered authoritative alongside FASB and SEC guidelines.
- Emerging Issues Task Force (EITF) consensus also represents authoritative guidance to address specific accounting issues that arise.
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Description
Test your knowledge of Generally Accepted Accounting Principles (GAAP) with this quiz. Learn about the accounting standard adopted by the SEC and commonly used by U.S. companies. Explore the Accounting Standards Codification (ASC) and its role in maintaining the accounting standards.
