Question

All the following are true regarding the FASB Accounting Standards Codification except

1. The Codification changes the way GAAP is documented, presented, and updated
2. The goal of the Codification was to provide one place where all authoritative literature about a particular topic could be found
3. The purpose of the Codification is to create new GAAP
4. The Codification was created to simplify user access

Answer 1

The FASB Accounting Standards Codification changes how GAAP is documented, simplifies user access, and provides a single authoritative source of existing GAAP.

Step-by-step explanation:

The FASB Accounting Standards Codification (ASC) is a centralized source of U.S. Generally Accepted Accounting Principles (GAAP). It was created by the Financial Accounting Standards Board (FASB) to organize and simplify the access to GAAP guidance. While all the given statements are true about the Codification, the purpose of the Codification is not to create new GAAP, but rather to provide a single authoritative source for existing GAAP.

The goal of the Codification was to bring together all the different accounting standards and pronouncements into one place, making it easier for users to find the relevant information. It eliminates outdated content and provides consistent structure and formatting.

In summary, the FASB Accounting Standards Codification changes the way GAAP is documented, presented, and updated, simplifies user access, and provides a centralized source of existing GAAP.