Chair's corner.

• Author: Fletchall, Randy

Many CPAs have observed that the proliferation of the collective body of generally accepted accounting principles in the U.S. has contributed to complexity in financial reporting. There has been a hierarchy of GAAP to follow, with a multitude of pronouncements from multiple sources to consider in evaluating the appropriate accounting treatment. But, thankfully, that's about to change.

On Jan. 15, the Financial Accounting Standards Board released the FASB Accounting Standards Codification[TM] and related online Codification Research System. The Codification promises to organize the enormous body of accounting standards in a manner that makes GAAP more understandable and easier to use. It is not a rewrite of GAAP, nor does it add or delete any standards. Instead, it takes the existing GAAP pronouncements from the FASB, the Emerging Issues Task Force, the AICPA's Accounting Standards Executive Committee, and other sources, and organizes them into roughly 90 topics using a consistent structure. The Codification essentially flattens the hierarchy and puts the more than 2,000 pronouncements from various sources all in one place. Once it is adopted during the first half of 2009, the Codification will be the sole source of non-SEC authoritative GAAP.

The AICPA has praised the FASB for its Codification project. Not only will it reduce the time and effort required to research accounting issues, but it also will reduce the risk of noncompliance with standards, provide real-time updates, assist with international convergence and serve as the authoritative reference source for the U.S. GAAP XBRL taxonomy.

As the Codification applies to all AICPA members, whether preparers, auditors, tax practitioners, financial statement users, academics or students, I urge you to acquaint yourself with it. Access is free during the year-long verification period (register at http://asc.fasb.org). The best way for the final Codification to be complete, effective, efficient and consistent is for you to use it and provide input!

The AICPA also will be providing the FASB with comments on the Codification. The PCPS Technical Issues Committee--which monitors...