FASB Codification Guide-2

Hint the relevant codification topic is located in

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Unformatted text preview: ‖ which provides SEC guidance on the classification of redeemable preferred stock. Problems P1: Identify the specific Codification Topic, Subtopic, and Section that contain guidance on the initial measurement of foreign currency transactions. P2: A reporting entity that is an SEC registrant is planning to adopt, in a future reporting period, a recently issued accounting standard. a. Does the SEC require the entity to disclose in the current reporting period the future effect that the accounting change is expected to have on the entity’s financial statements? (Hint: the relevant Codification Topic is located in the Presentation Area.) b. Identify the specific Codification Topic, Subtopic, Section, and paragraph in which the SEC guidance that answers the above question is located. Lesson 3: Working with Section-Level Content 34 LESSON Understanding the Scope of Guidance 4 Lesson Scenario Eric is auditing the financial statements of a not-for-profit entity. During the accounting period covered by the audit, the entity opened its first shelter to house the homeless and incurred advertising costs to increase awareness of the shelter throughout the local community. One of Eric’s audit tasks is to determine whether the entity’s advertising costs have been accounted for and reported correctly in accordance with U.S. GAAP. He knows that much of the guidance within the Codification applies to certain entities, transactions, and events but not to others. Therefore, whenever Eric finds specific guidance in the Codification that appears to be relevant to his task, he verifies the scope of the guidance before relying on it. In particular, Eric reviews Section 15, Scope and Scope Exceptions, within each Subtopic he examines. This is easy for him to do in the System because he knows how to navigate quickly among and within Subtopics. Learning Outcomes If you intend to rely on specific accounting guidance that you find in the Codification, it is essential that you understand exactly wh...
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