New FASB Standards Codification: Are You Ready?

1 CLICK ON EACH FILE IN THE LEFT HAND COLUMN TO SEE INDIVIDUAL no column is present: click Bookmarksor Pageson the left side of the window. If no icons are present: Click View, select Navigational Panels, and chose either Bookmarksor you need assistance or to register for the audio portion, please call Strafford customer service at 800-926-7926 ext. 10 New FASB Standards codification : Are You Ready? Leveraging Essential and Non-Essential Guidance to Prepare GAAP Statements and FootnotespresentsToday's panel features:Tom Hoey, Project Director, FASB codification Project, Financial accounting Standards Board, Norwalk, Haight, Shareholder, GBH CPAs PC, HoustonMichael Westervelt, Manager, Assurance and accounting Quality Group,LarsonAllen, Charlotte, Weber, Partner, Corporate Group,Faegre & Benson, MinneapolisWednesday, October 14, 2009 The conference begins at:1 pm Eastern12 pm Central11 am Mountain10 am PacificThe audio portion of this conference will be accessible by telephone only.

2 Please refer to the dial in instructions emailed to registrants to access the audio portion of the Live 110-Minute Teleconference/Webinar with Interactive Q&ANew FASB accounting StandardsNew FASB accounting StandardsCodificationCodificationTMTM::A re You ready ? WebinarAre You ready ? WebinarOct. 14, 2009 Oct. 14, 2009 Explanation Of FASB CodificationExplanation Of FASB CodificationBy Director Of FASB codification And XBRL ProjectsBy Director Of FASB codification And XBRL ProjectsThomasThomasHoeyHoey, Thomas, ThomasHoeyHoey& Associates, LLC& Associates, LLChoeytjhoeytj@ Slide 22 TodayToday s Agendas AgendaBackgroundBackground Overview and timingOverview and timing Why codify?

3 Why codify? What was codified?What was codified? How is the codification structured?How is the codification structured? How will FASB update the codification ?How will FASB update the codification ?WalkWalk--throughthroughSli de Slide 33 OverviewOverviewSingle source of Single source of GAAP for GAAP for non--governmental entities in a topically organized formatgovernmental entities in a topically organized format Major restructuring into roughly 90 topicsMajor restructuring into roughly 90 topics Codifies previous level ACodifies previous level A--D GAAP issued by a standardD GAAP issued by a standard--settersetter Supersedes previous level aSupersedes previous level a--d GAAP issued by a standard d GAAP issued by a standard setter, except for guidance issued by the SECsetter.

4 Except for guidance issued by the SECNot intended to change GAAPNot intended to change GAAPE liminates the multipleEliminates the multiple--tiered GAAP hierarchy in favor of tiered GAAP hierarchy in favor of two levels: authoritative and nontwo levels: authoritative and non--authoritativeauthoritativeAny sources of GAAP not included in the codification are Any sources of GAAP not included in the codification are nonnon--authoritative, except for grandfathered guidanceauthoritative, except for grandfathered guidanceIn addition to the codification content, there is an online In addition to the codification content.

5 There is an online codification Research System designed to improve the codification Research System designed to improve the usability of authoritative GAAP usability of authoritative GAAP Slide Slide 44 TimingTimingAuthoritative version was made available Authoritative version was made available July 1, 2009 July 1, 2009 codification is effective for interim and codification is effective for interim and annual periods ending after Sept. 15, 2009 annual periods ending after Sept. 15, 2009 Why Codify?Why Codify?Slide Slide 55 Slide Slide 66 accounting BC (Before codification ) accounting BC (Before codification ) accounting Research BulletinsAccounting Principles Board OpinionsAICPA accounting InterpretationsFASB StatementsFASB InterpretationsFASB Technical BulletinsFASB Staff Implementation GuidanceFASB Staff PositionsFASB Concepts StatementsEITF Abstracts (and issue summaries)

6 EITF Appendix DAICPA Statements of PositionAICPA Audit and accounting GuidesAICPA Audit Risk AlertsAICPA Practice BulletinsAICPA Technical Questions and AnswersAICPA Issues Papers SEC S-X RulesSEC S-K ItemsSEC ASR / FRR codification SectionsSEC SAB codification TopicsSEC Speeches topics CoveredNote: Not all of the above were level A-D GAAP and therefore were not in the FASB accounting Standards Codification77 Why Codify?Why Codify?Constituent concern that GAAP was Constituent concern that GAAP was overly confusing and difficult to researchoverly confusing and difficult to research Multiple standardMultiple standard--setters, multiple types of setters, multiple types of Standards , multiple indexing schemes, different Standards , multiple indexing schemes, different levels of authority, not integrated, of authority, not integrated.

7 Simplify user access by codifying all authoritative Simplify user access by codifying all authoritative GAAP in one GAAP in one spotSlide Slide 88 Codified ContentCodified ContentAddressed in detail in the Notice to ConstituentsAddressed in detail in the Notice to ConstituentsCodification codification includesincludes Authoritative guidance Authoritative guidance For example, Standards sections, implementation guidance, and soFor example, Standards sections, implementation guidance, and soforthforth Selected portions from Basis for ConclusionsSelected portions from Basis for Conclusions AICPA TIS content for Software Revenue RecognitionAICPA TIS content for Software Revenue RecognitionCodification codification excludesexcludes Content deemed redundant or nonContent deemed redundant or non--authoritative authoritative For example, much of basis for conclusionsFor example, much of basis for conclusionsConcept StatementsConcept Statements Grandfathered content Grandfathered content Certain soonCertain soon--toto--be superseded content ( , FAS 141)be superseded content ( , FAS 141)

8 Slide Slide 99 Codified Content Codified Content SECSECSEC content is the domain of the SEC SEC content is the domain of the SEC SEC content included in codification topics , but SEC content included in codification topics , but in separate SEC sections in separate SEC sections SEC guidance is required only for SEC registrantsSEC guidance is required only for SEC registrants Many private companies do not want SEC guidanceMany private companies do not want SEC guidanceSEC Material sections include the full text of the SEC Material sections include the full text of the relevant guidancerelevant guidanceSlide Slide 1010 How Is The codification How Is The codification Structured?

9 Structured?Terminology is important for effective communicationTerminology is important for effective communicationAreas: Areas: Five groupings of topicsFive groupings of topics General PrinciplesGeneral Principles PresentationPresentation Financial Statement AccountsFinancial Statement AccountsAssets, liabilities, equity, revenue, expenseAssets, liabilities, equity, revenue, expense Broad TransactionsBroad TransactionsBusiness combinations, leases, combinations, leases, etc. Industry Industry topics : topics : Broadest categorization of related contentBroadest categorization of related contentSubtopics: Subtopics: Generally distinguished by type or scopeGenerally distinguished by type or scopeSections:Sections:Nature of the content, such as recognition, Nature of the content, such as recognition, measurement, disclosure, and so forthmeasurement, disclosure, and so forthSubsections: Subsections.

10 Allows further segregation and navigation Allows further segregation and navigation of contentof contentSlide Slide 1111 ExampleExampleTopicSubtopicsSectionsSubs ectionsLeasesScopeDisclosureScopeScopeDi sclosureDisclosureCapitalLeasesOperating LeasesOverallLesseesLessorsNote: This is for illustration only and does not include all topics , Subtopics, Sections and Subsections. LesseesLessorsLesseesLesseesLessorsLesso rsLessorsLessorsLesseesLesseesSlide Slide 1212 How Will FASB Update The How Will FASB Update The codification ? codification ?Through FASB Statement 168, codification updates integrated Through FASB Statement 168, codification updates integrated Standards on an afterstandards on an after--thethe--fact basisfact basisBeginning with the effective date Beginning with the effective date FASB will issue the results of Standards activity as an FASB will issue the results of Standards activity as an accounting accounting Standards UpdateStandards Updatenumbered as Year numbered as Year Sequence (such as, 2009 Sequence (such as, 2009--05) 05) that includes:that includes.