The Accounting Standards Codification (ASC) is a comprehensive database of accounting standards and guidance developed by the Financial Accounting Standards Board (FASB).
Before the ASC was developed, accounting standards were spread out across a number of different sources, making it difficult for preparers and users of financial statements to find and apply the appropriate guidance. The ASC was created to address this issue by consolidating all authoritative accounting guidance in one place.
The ASC is organized into a series of topics, subtopics, sections, and paragraphs. Each topic represents a broad area of accounting, such as revenue recognition or leases, while subtopics provide more specific guidance within each topic. Sections and paragraphs provide even more detailed guidance.
One of the key benefits of the ASC is that it provides a single, authoritative source for accounting guidance. This helps to promote consistency and comparability in financial reporting, making it easier for investors and other stakeholders to analyze and compare financial statements.
The ASC also provides additional features to help users navigate and apply the accounting guidance, such as cross-references between related topics and sections, and examples to illustrate how the guidance should be applied in practice.
In addition to providing guidance on existing accounting standards, the ASC is also updated regularly to reflect changes in accounting standards and emerging issues. This helps to ensure that the guidance remains relevant and up-to-date in a constantly changing business environment.
To access the ASC go to this website: https://asc.fasb.org/.
Overall, the Accounting Standards Codification is an important tool for preparers and users of financial statements. By consolidating all authoritative accounting guidance in one place, the ASC helps to promote consistency, comparability, and transparency in financial reporting.