The Financial Accounting Standards Board (FASB) released Accounting Standards Codification 105 (ASC 105) to address Generally Accepted Accounting Principles, also known as GAAP.  The standard discusses what GAAP is, and how it is used in accounting, which entities it applies to, and the hierarchy which exists that tells accountants which standards have more authority than others.

While to many accountants and auditors, GAAP is something that they are so familiar with that they do not need to have a standard to reference, including this provides a nice introduction to the codification.  Also, for those less familiar with the hierarchy, it is an easily accessible reference to review.

Check out more high level explanations of the FASB ASC in our Guide to the Accounting Standards Codification!

*Technical versions of the standards, authoritative literature can be found in the Financial Accoutning Standards Board website.

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