“Accounting is the language of business…” Warren Buffett
It may not be obvious, but it’s critical for sales and other non-accounting professionals to stay current on new accounting standards, including ongoing updates issued by the Financial Accounting Standards Board (FASB) and the International Accounting Standard Board (IASB). Accounting standards and updates can impact corporate strategy and decision making, including how to best access, use or acquire technology, which is why we pay close attention to accounting.
First, some background on FASB and IASB. What are these organizations?
The Financial Accounting Standards Board is a private, non-profit organization, standard-setting body whose primary purpose is to establish and improve Generally Accepted Accounting Principles (GAAP) within the United States in the public’s interest. New standards are issued by topic and number as Accounting Standard Updates (ASU) and then finalized as Accounting Standards Codification (ASC); older standards were issued as Financial Accounting Standards (FAS), Statement of Position (SOP) modifications and few other acronyms, most of which are being superseded by new ASC standards. All standards are refined and updated on an ongoing basis.
The International Accounting Standards Board presides over the IFRS Foundation, a non-profit organization, standard-setting body which establishes and improves international financial reporting standards (IFRS) for public-interest entities. Most countries (144 of 166 profiled jurisdictions) mandate IFRS standards for financial statements. Only five countries in the G20 have not fully mandated IFRS standards. China, India, Indonesia, Japan and the USA all have national standards. New standards are issued by topic and number as International Financial Reporting Standards (IFRS); older standards were issued as International Accounting Standards (IAS), most of which are being superseded by new IFRS standards. All standards are refined and updated on an ongoing basis.
Published Standards Both FASB and IASB post accounting standards and other helpful content on their websites. Much of the content is free, but both sites offer paid subscription services for additional content, content management and analysis as well. Below is an overview of each website, including highlighted links.
|Financial Accounting Standards Board||International Accounting Standards Board|
Standards: ASU Issued
Effective: ASU Effective Dates
Subscription: FASB Codification Online
Professional View – Paid
Basic View – Free
Standards: IFRS Standards
Effective: Completed Projects
Subscription: IFRS online (eIFRS)
eIFRS Comprehensive – Paid
eIFRS Professional – Paid
eIFRS – free
Accounting standards are not static, they are reviewed frequently and updated periodically by various groups and committees. Although joint resources are often shared to create consistent new accounting standards, FASB and IASB standards may not cross-reference perfectly by single topic. You may have to research multiple standards on both sides of the equation to make an accurate comparison.
Accounting Firm Guidance and Interpretation. Many new topics and existing standards are discussed frequently at FASB and IASB meetings, which are posted on their respective websites. The major accounting firms also have extensive free content and discussion around accounting standards as well. The “Big Four” firms offer useful content, as do the top 20 global firms, for non-accountants and accountants alike. Many have excellent USA GAAP vs IFRS comparison guides.
New Standards. ASC 842 and IFRS 16 (both titled “Leases”) and ASC 606 and IFRS 15 (both titled “Revenue from Contracts with Customers”) are new and highly relevant, globally. These accounting standards already have numerous updates and refinements; it is important to monitor these for ongoing updates. ASC 350, ASC 985 and IAS 38, are standards relating to intangible assets and software, which are highly relevant with our vendor partners and their end-user clients.
During the course of providing vendor financing programs and value-based selling programs for our vendor partners, Technology Finance Partners is frequently asked questions about accounting options and impact on many of our deliverables. While TFP does not provide formal accounting advice, we do research accounting topics frequently to be knowledgeable in working on accounting related issues with our vendor partners and their end-user clients. We use many of the resources discussed here, and I hope you may find some of these resources useful for your own independent accounting research.