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What is the difference between the codification and the codification research system?

Short Answer

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Codification is the collection of all the Generally Accepted Accounting Principles (GAAP) all together in one frame is defined as codification. On the other hand, a codification research system is an online system that provides easy access to codification in an online portal on a real-time basis.

Step by step solution

01

Meaning of Codification

The financial accounting standards board (FASB), accounting standards codification (codification) is an accumulation of all generally accepted accounting principles (GAAP) in one place.

Its objective is to merge all the existing GAAP and not create a new one. The accumulated GAAP created by the process of codification is considered an authorized one.

02

Difference between codification and codification research system

  • Codification means coding of all the accounting standards that are present within the generally accepted accounting principles, whereas codification research system (CRS) means performing research in accounting principles within the generally accepted accounting standards.
  • The objective of codification is to assemble accounting standards. On the other hand, the codification research system’s (CRS) objective is to enhance its efficiency in the search for information within the accounting standards.
  • Codification relieves the user by providing the framework for accessing and finding data, whereas CRS helps in evaluating and implementing new methods to improve the codes and decrease the time taken by the users.
  • Codification also clarifies user access and actual representation of authorized U.S generally accepted accounting principles (GAAP). On the other hand, the codification research system’s task is to create an updated codification research system for the released result of the standard-setting activity.

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Most popular questions from this chapter

ETHICS (Rule-Making Issues) When the FASB issues new pronouncements, the implementation date is usually 12 months from date of issuance, with early implementation encouraged. Karen Weller, controller, discusses with her financial vice president the need for early implementation of a rule that would result in a fairer presentation of the company’s financial condition and earnings. When the financial vice president determines that early implementation of the rule will adversely affect the reported net income for the year, he discourages Weller from implementing the rule until it is required.

Instructions:Answer the following questions.(a) What, if any, is the ethical issue involved in this case?

Accounting standard-setters use the following process in establishing accounting standards:

  1. Research, exposure draft, discussion paper, standard.
  2. Discussion paper, research, exposure draft, standard.
  3. Research, preliminary views, discussion paper, standard.
  4. Research, discussion paper, exposure draft, standard.

Differentiate broadly between financial accounting and managerial accounting.

GAAP stands for:

  1. governmental auditing and accounting practices.
  2. generally accepted attest principles.
  3. government audit and attest policies.
  4. generally accepted accounting principles

(FASB and Standard-Setting) Presented below are four statements which you are to identify as true or false. If false, explain why the statement is false.

  1. GAAP is the term used to indicate the whole body of FASB authoritative literature.
  2. Any company claiming compliance with GAAP must comply with most standards and interpretations but does not have to follow the disclosure requirements.
  3. The primary governmental body that has influence over the FASB is the SEC.
  4. The FASB has a government mandate and therefore does not have to follow due process in issuing a standard.
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