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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.(c) What does Weller have to gain by advocacy of early implementation?

Differentiate between “financial statements” and “financial reporting.”

What organizations are the two key international players in the development of international accounting standards? Explain their role.

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.(b) Is the financial vice president acting improperly or immorally?

In what ways it felt that the pronouncements issued by the Financial Accounting Standards Board would carry greater weight than the opinions issued by the Accounting Principles Board?

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