Accounting Updates (#182)
/In this podcast episode, we discuss how to keep up with the latest accounting standards. Key points made are noted below.
Basic Sources of Accounting Information
It’s useful to know where you can get the basic set of source material each year. Generally Accepted Accounting Principles are put out by the Financial Accounting Standards Board in Norwalk, Connecticut, which we refer to as the FASB. And International Financial Reporting Standards are put out by the International Accounting Standards Board in London, which is called the IASB.
Each one of them sells the complete set of accounting standards that they produce; so, you can buy the four-volume set of accounting standards from the FASB from their website, which is fasb.org. You can also buy the two-volume IFRS set from the FASB, though you can also buy it from the IFRS website, which is located at ifrs.org.
Most people simply buy these editions, and that’s all they do. But it’s also useful to know about what’s changing in the accounting standards. If you look at the IFRS books, there’s a section at the beginning of each chapter that lists any changes to the topic. That’s an easy way to figure out if there’re any updates that might impact you. And this may be enough, since there’s usually a year or two delay before a new standard goes into effect. So even though the book may be a few months old, it may contain all of the information that you need.
And by the way, I find that the IFRS books are extremely easy to read, especially since they split off a lot of the supporting material and stick it in volume 2. That means everything you really need is in just one book.
GAAP Research Issues
The GAAP books are not so easy. There’s a status section at the front of each chapter that points out the general topic areas that have been changed, but then you have to dig around to find out what the changes really are.
So with GAAP, the better approach is to go to the FASB website and look up the accounting standards updates on their search bar. We call them ASUs. These updates are a really fine piece of work. You can easily skim down the list of updates and see which ones might apply to you, and then download the PDF file. Each of these documents lists the nature of the change at a summary level, and then it lists the detailed change. They also note how the changes vary from IFRS. I think these are the perfect way to keep up to date on GAAP. Strongly recommended.
This is definitely your best bet for information about GAAP updates.
IFRS Research Issues
Unfortunately, they don’t have the same thing on the IFRS website. If you do a search on the word updates on that site, they give you PDF summaries of their meeting minutes. And I don’t know about you, but I have a lot more important things to do than to skim through those.
You really have two choices for getting IFRS updates. One is to wait for the annual book to be delivered, and just scan through it for the updates. It’s not that hard.
The other choice is to sign up for their e-mail alerts, which is what I do. The trouble is, you may receive a lot of updates, and nearly all of them are just about meeting notifications. That means you’ll have to sort through all of the e-mails to spot anything that might relate to you. I just wish the IASB could adopt the format of the accounting standard updates. Oh well.
One more hint in regard to IFRS is to go to their website and do a search on “Latest File Uploads.” That takes you to a page that contains PDFs of all the most recent publications. The trouble is that most of them are translations, so you may see something that’s actually pretty old – it just happens to have recently been translated into Russian.
A variation on this is to get a free account for the site, login, and then do a search on publication director. This has a bunch of sort options, so you can dig around through a lot of material. But, it’s just not as simple to use as the ASUs.
So in short, bookmark the FASB accounting standards updates page in your web browser, and buy the annual editions from both organizations. That will certainly keep you up-to-date.