Unformatted text preview: Topic, with specific exceptions that apply only to the non-Overall Subtopic. For example, the
scope declaration in Section 840-40-15 reads: ―This Subtopic follows the same Scope and
Scope Exceptions as outlined in the Overall Subtopic . . . with specific transaction
qualifications noted below. . . .‖
If a Section 15 scope declaration is associated only with the Subtopic in which it is
located, then it is considered an independent scope declaration for the Subtopic.
The following are examples of independent scope declarations: The Overall Subtopic of Topic 720, Other Expenses, does not have a Section 15.
Each of the other Subtopics of Topic 720 does have a Section 15 that establishes
the scope of each Subtopic independently of the scope of the other Subtopics.
The Overall Subtopic of Topic 210, Balance Sheet, has a Section 15 that
establishes the independent scope of that Subtopic. The only other Subtopic of
Topic 210 also has a Section 15 that establishes the independent scope of that
Subtopic. All four kinds of Section 15 scope declarations are still subject to scope exceptions declared
elsewhere within the same Subtopic. COMPREHENSIVE EXAMPLE
The following comprehensive example is based on the Lesson Scenario that appears
at the beginning of this lesson. Go back and review the scenario now. Then continue reading
on to learn how Eric would verify the scope of guidance on accounting for advertising costs.
From past experience, Eric knows that Subtopic 35, Advertising Costs, of Topic 720,
Other Expenses, might be relevant to his research question.
Eric navigates to paragraph 720-35-15-1 and reads ―The guidance in this Subtopic
applies to all entities, including not-for-profit entities (NFPs).‖ Eric therefore knows that the
entity he is auditing falls within the scope of the guidance in Subtopic 720-35, subject to
scope exceptions that might be stated elsewhere in the Subtopic. Lesson 4: Understanding the Scope of Guidance 39 Look Now
Go to Section 15
of each Subtopic
Observe how the
wording of these
different from the
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- Fall '09
- ........., Financial Accounting Standards Board