| page 3, and final page Using the Internet to Research US Financial Accounting Standards previous page IV. Links to Accounting Standards Information Relevant to the Three “Accounting Problems” Described in Section II. The three accounting problems and links related to the problems are: A. Problem: When a manufacturing process is changed in a company, and manufacturing equipment is relocated as part of the process change, is the cost to relocate the equipment expensed or capitalized? This link, http://www.sec.gov/news/speech/speecharchive/1996/spch126.txt, takes you to an older, but seemingly still relevant, speech made by the chief accountant of the Securities and Exchange Commission in 1996. Under the section “Matching and Loss Deferrals”, the chief accountant discusses problems, concerns, and concepts related to capitalizing versus expensing costs related to assets. This link, http://www.fasb.org/pdf/con6.pdf, takes you to the Statement of Financial Accounting, Concepts No. 6 (Elements of Financial Statements). Searching on “relocation” will bring you to the section dealing with “Future Economic Benefits”, and statements about the uncertainty of the future benefits derived from “relocating” plant equipment, and therefore the desirability of expensing these relocation costs. B. Problem: The company will be buying new software in the future. What about setting up a reserve account (as a liability account) for this future purchase? An article, read at this site, http://www.sec.gov/news/speech/speecharchive/1998/spch219.htm, written by the chief accountant of the SEC’s Division of Enforcement, discusses the pervasiveness of the use of reserve (liability) accounts, and cautions against it. C. Problem: The company is spending a lot of money to set up its website. Are these costs expensed or capitalized? V. Final Comment. In the introduction to this article is this paragraph: The hoped-for-result of this Internet research project was to find that most, if not, all currently relevant US accounting standards (GAAP) are readily available on the Internet, and that they could be efficiently and effectively searched. Unfortunately, the hoped-for-result was not found. Good accounting standards guidance was found on the Internet for the “accounting problems” that were researched in this project. However, all relevant US accounting standards and associated documentation, including those standards that predate the establishment of the FASB, and those promulgated by the AICPA, should be readily and freely searched, with the standard of a “Google search”. This is certainly not the case, and the hoped-for-result was not found. please click here to comment on this article or to suggest a topic for another article please click here to return to the Management Accounting Information Center's homepage |