US GAAP and the FASB Codification
Plain-English guides to the accounting rules US companies follow, each with a worked example.
Start with
- What is US GAAP? How the Codification works4 minute readWhat US GAAP is, who sets it, how the FASB Accounting Standards Codification is organised, how updates are made, and who must use it, with an example.
- The main US GAAP Codification topics explained4 minute readThe main FASB Codification topics from ASC 205 to ASC 985, each explained in one line, how topic numbers work, and the matching IFRS for the big topics.
- How to read an accounting standard4 minute readHow an IFRS standard and a US GAAP topic are structured, which parts are authoritative, how paragraph references work, and a method for reading any standard.
- IFRS vs US GAAP: the key differences in one guide4 minute readThe key differences between IFRS and US GAAP: inventory, property, impairment, development costs, leases, credit losses and provisions, with a worked example.
Topics covered in depth
ASC 842 guides
- ASC 842 leases explained3 minute readASC 842 lease accounting explained: right-of-use assets and lease liabilities, operating vs finance leases, what changed from ASC 840, and the numbers.
- Operating vs finance leases for lessees3 minute readOperating vs finance lease under ASC 842: the five lease classification criteria, the 75% and 90% guidelines, examples, and what each type does to the numbers.
- ASC 842 lessee journal entries with examples3 minute readASC 842 journal entries for lessees with a worked example: initial recognition, operating lease and finance lease entries, and right-of-use asset amortization.
- Discount rates under ASC 842, including the risk-free rate election3 minute readHow to choose the ASC 842 discount rate: the rate implicit in the lease, the collateralized incremental borrowing rate, and the risk-free rate election.
- Lessor accounting under ASC 8423 minute readASC 842 lessor accounting explained: classifying sales-type, direct financing and operating leases, the net investment, selling profit and lease income.
ASC 606 guides
- ASC 606 revenue recognition explained4 minute readASC 606 revenue recognition explained: the core principle, the five-step model, deferred revenue and contract assets, key differences from IFRS 15 and ASC 605.
- The ASC 606 five-step model with examples3 minute readThe ASC 606 five-step model explained with a SaaS revenue recognition example: performance obligations, standalone selling price and deferred revenue.
- Principal vs agent under ASC 6063 minute readPrincipal vs agent under ASC 606: how to decide gross vs net revenue, the control test and indicators, with marketplace, rideshare and travel examples.
- Contract costs under ASC 340-403 minute readASC 340-40 explained: capitalized commissions and other costs to obtain a contract, costs to fulfill a contract, the practical expedient and amortization.
- ASC 606 for SaaS and software companies3 minute readSaaS revenue recognition under ASC 606: subscriptions, implementation and setup fees, usage-based pricing, multi-year deals and deferred revenue, with examples.
More topics
Guides on ASC 740 income taxes, ASC 326 credit losses, ASC 350 goodwill and the other main topics are being added. In the meantime, the main Codification topics explained gives you the full map.