Case 1-1

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Case 1-1 Sources of US GAAP The FASB ASC is now the sole authoritative source for all US US GAAP. Required: a. What are the major goals of the FASB ASC? As noted (Schroeder et al, 2019) “found, non-authoritative guidance from other sources can be considered, which include, however, are not limited to, practices that are widely recognized in the industry, AICPA issues papers, FASB concepts statements, International Financial Reporting Standards of the International Accounting Standards Board Pronouncements, and accounting textbooks. (FASB ASC 105-10-05, 2009).”  To disentangle accessibility on all authoritative U.S. generally accepted accounting principles (GAAP) by codification in a single location  To prove that the codified content accurately represented authoritative U.S. GAAP  To create a codification research system that is current for the released results of the standard-setting activity As noted (Dimitrou, 2021), “the Generally Accepted Accounting Principles (GAAP) is a term that has emerged over the last decades and concerns "all accounting regulations" from wherever they come from, e.g., regulations deriving from: a. local (national) corporate law b. national and international accounting standards c. requirements of local (national) stock exchanges and capital markets. b. How is the FASB ASC expected to improve the practice of accounting?  To minimize the amount of time and work required to solve an accounting research problem  Reduce the risk of noncompliance by enhancing the serviceability of the research literature  Suggest accurate information with real-time updates as Accounting Standards Updates are made public  By aiding the FASB with the research and efforts of confluence of larger accounting standards c. What literature is now contained in the FASB ASC? The FASB ASC is comprised of current authoritative literature provided by different standard setters such as the Financial Accounting Standards Board (FASB), American Institute of Certified Public Accountants (AICPA), Emerging Issues Tasks Force (EITF), and the U.S. Securities and Exchange Commission (SEC) d. What should an accountant do if the guidance for a particular transaction or event is not specified within the FASB ASC? The accountant should ponder accounting principles for similar related transactions or events that are within a source of authoritative GAAP if not otherwise specified within the FASB ASC. If no similar transactions or events are found, non-authoritative guidance from other sources should be considered, which include, however, are not limited to, practices that are widely recognized in the industry, AICPA issues papers, FASB concepts statements, International Financial Reporting Standards of the International Accounting

Standards Board Pronouncements, and accounting textbooks. (FASB ASC 105-10-05, 2009) One bible verse I found interesting that applies is the Book of Corinthians. According to 2 Corinthians 4:16-18, “So we do not lose heart. Though our outer self is wasting away, our inner self is being renewed day by day. For this light momentary affliction is preparing for us an eternal weight of glory beyond all comparison, as we look not to the things that are seen but to the things that are unseen”. This could be a seen that as good accountants we shouldn’t lose our good heart of good ethics and we should renew ourselves daily by the guidance of GAAP standards and purely act ethically and do what is morally right. References: 2 Corinthians 4:16-18, (53-54 CE). Bible Gateway New International Version. Retrieved on October 29 th , 2023 from: https://www.biblegateway.com/passage/?search=2%20Corinthians %204%3A16-18&version=NIV Dimitriou, M. (2021). “What is the importance of financial reporting from Local GAAP toIFRS for companies, and how can the accounting treatment influence this factor within firms’ valuation concept?”. Multinational Finance Conference Booklet, 27:25 Schroder, R. G., Clark, M. W., & Cathey, J.M. (2019). Financial Accounting Theory & Analysis 13 th Edition . Wiley Textbooks.

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