The Codification organizes U.S. GAAP by 90 topics or issues on a new Web site, http://asc.fasb.org. FASB expects the new structure and system will reduce the amount of time and effort required to solve an accounting research issue, improve usability of the literature thereby mitigating the risk of noncompliance with standards, and provide real-time updates as new standards are released. In addition, the system should become the authoritative source of literature for the completed XBRL taxonomy.

The structure includes all accounting standards issued by a standard-setter within levels A through D of the current U.S. GAAP hierarchy, including FASB, American Institute of Certified Public Accountants (AICPA), Emerging Issues Task Force (EITF), and related literature. It excludes governmental accounting standards.

"For a long time, many users have said that GAAP is confusing," said Barry Melancon, AICPA president and CEO. "The Codification represents a simplification of the enormous body of accounting standards. It renders GAAP more understandable and accessible for research."

During the one-year verification period, FASB will make the Codification available through a new Web-based research system to solicit feedback from constituents to confirm that the Codification accurately reflects existing GAAP for nongovernmental entities.

After receiving feedback, FASB is expected to formally approve the Codification as the single source of authoritative U.S. GAAP, other than guidance issued by the Securities and Exchange Commission. The Codification will include authoritative content issued by the SEC, as well as selected SEC staff interpretations.

Upon approval by FASB, all accounting standards (other than the SEC guidance) used to populate the Codification will be superseded. At that time, with the exception of any SEC or grandfathered guidance, all other accounting literature not included in the Codification will become nonauthoritative.

Users who register at http://asc.fasb.org are able to review the Codification free of charge and provide specific content-related feedback at the individual paragraph level as well as general system-related feedback. During the verification period, Codification content will be updated for changes resulting from constituent feedback and new standards.

FASB provides a 52-page document on how to use the new tool at:
http://asc.fasb.org/imageRoot/56/2304556.pdf

Editor's Note: updated Jan. 20 to place Web site link in second paragraph, add AICPA comment, and add PDF link.