Codification vs. US GAAP Hierarchy: A Preliminary Study of the Accounting Lexicon Post-Codification

Abstract

The FASB Codification project, announced in 2004, aimed to simplify user access to authoritative GAAP and to create a searchable retrieval system. It entered the verification phase on January 15, 2008 and was completed on July 1, 2009, becoming the single source of authoritative non-governmental U.S. GAAP. Throughout the project authors were charged with changing as few words as possible. Our initial comparison of terms used in the first three levels of the GAAP hierarchy to those terms used in the Codification finds that although the authors were generally internally consistent in the Codification, there are instances where terminology differs from the terminology used in the original pronouncements. We are also able to identify the introduction of new terms. Notably, an overwhelming percentage of these new terms are not included in the Codification Glossary. Our review of the incorporation of these new terms into selected accounting textbooks and academic literature indicates they have been slow to adopt new terms. The introduction of new terms combined with the failure to include those terms in materials used by students is likely to create barriers to students� successful information seeking.