The Impact of ASC of Accounting Standards Codification (ASC)

As is the case with any reorganization of laws, there’s an impact on companies, not-for-profit organizations, and government entities. When the Financial Accounting Standards Boards (FASB) adopted the Accounting Standards Codification (ASC) as the new system for organizing financial laws, industry professionals wondered what it would mean for organizations. As part of our ASC resources section, this page examines how ASC codes can impact your organization’s financial situation.

ASC Codes & Your Organization
Accounting Standards Codification altered how standards were referred to, as well as portions of their functionality and meaning. The following are three specific sections of law (ASC 718, ASC 805 and ASC 350) that organizational managers should be aware of, including:

  • ASC 350: After transitioning FASB 142 into the newer ASC 350, organizations are now held to standards when it comes to the amortization of goodwill. Specifically, ASC 350’s predecessor, SFAS 142, removed goodwill amortization and made it mandatory to perform a yearly test for impairment of value regarding intangible assets.
  • ASC 718: Determining the value of complex derivative instruments is increasingly important for many companies. ASC 718 (formerly SFAS 123) highlights the need to re-evaluate those instruments and developed comprehensive reporting systems. This makes it vital to hire an independent firm that understands how to accurately appraise stock options, so you can maintain lower maintenance and reporting costs.
  • ASC 805: This law is especially applicable to acquired entities as it relates to reporting and using financial information. The shift from FASB 141 to ASC 805 changed the way organizations categorize their intangible assets. Now, when businesses determine the fair value of intangible assets acquired, their appraisal firm should also separate assets into two categories – ‘identifiable remaining useful life’ and ‘indefinite useful life’.

The staff at Appraisal Economics is familiar with the subtle nuances to ASC codes. We’ve worked with many organizations similar to yours, so our professionals are seasoned in how ASC laws can impact your financial situation. Contact us today, and put our years of combined financial experience to work for you and your organization’s unique situation.