Essay --

GAAP principles have received a lot of support from substantial authorities. The AICPA’s code of conduct directs that its members should prepare their financial statements based on GAAP guidelines. For example, AICPA Rule 203 forbids a member from articulating an unprofessional opinion on financial statements that have deviated from adhering to GAAP principles. GAAP principles come from the several organizations. It is composed of a combination of more than 2,000 documents that have been used for approximately 60 years or so. It incorporates such items as FASB Standards Staff Positions and interpretations; APB inputs; and AICPA Research reports. A differing format in the documents that comprise GAAP, inconsistency and difficulty in interpretation make financial preparers to be unsure whether they have the right GAAP. This makes it hard for them to determine whether what they have prepared is authoritative or not. These facts led FASB to develop the FASB accounting standards co dification or The main goal of codification is to bring together all the reliable literature linked to a particular topic. The main purpose of codification is to change GAAP documentation, presentation and updates. Codification simplifies access to GAAP. FASB project of codifying GAAP was completed in 2009 and released the same year. During the codification period, all existing GAAP literature was officially withdrawn. Generally, codification does not change GAAP but it introduces a new, organized, more accessible and user-friendly structure. The accounting standards codification is important because it eliminates the multi-level hierarchy in order to bifurcate the authoritative and non-authoritative guidance. Codification incorporates all the relevant SEC g... ...category of related guidance such as assets. Most research using the Codification uses the browse function and it is done by selecting specific topics. In browsing, the possibility of having the same guidance in two places is eliminated (Raabe, Whittenburg, Sanders & Sawyers, 2011). The Codification structure comprises of â€Å"presentation† where the reporting aspects of GAAP are covered; â€Å"Assets† where assets such as investments, intangibles and receivables are covered; Liabilities where all types of liabilities such as contingencies are covered; Revenue which includes products such as services revenue; Equity which cover topics such as stock dividends and stock, and treasury stock; Industry for specifics such as real estates, entertainment; and â€Å"master glossary† which includes a compilation of terminologies from GAAP original documents (Espstein, Nach & Bragg, 2011).