Chapter 2
Review Questions
3. Aside from the FASB, name three other standard-setting bodies whose guidance is included in the Codification. Committee on Accounting Procedure (CAP), Accounting Research Bulletins (ARB), and Accounting Principles Board (APB).
6. Which search method does the FASB suggest that researchers use a starting point when conducting research? FASB suggest Browse searches or user-directed search.
7. In the following template for a Codification reference, what does each group of letters represent? XXX-YYY-ZZZ-PP XXX – Topic, YY – Subtopic, ZZ Section, PP – Paragraph
9. Is all SEC guidance within the Codification, and is SEC guidance considered authoritative for all entities? No and some SEC rules and requirements, such as management’s discussion and analysis disclosure requirements, are also authoritative for public companies but is only available at www.sec.gov.
18. Which additional areas in the guidance are considered “required reading” for researcher who has found general guidance in the Initial Measurement section, but who needs to be sure his or her search was thorough? Any relevant Implementation Guidance and SEC content are required reading. Three other areas researchers should consider is the overview section, scope section, and initial measurement.
19. What is the name of the guidance currently issued by the FASB to update the Codification? Is this guidance considered “authoritative” in its own right? It is called pending content.
20. What type of entity is permitted to apply accounting alternatives in the Codification? If a company elects to apply a given accounting alternative, does it mean the company must apply all of the available accounting alternatives? Explain A private company is permitted to apply accounting alternatives. They can apply one, all, or none of the available alternatives.
