When FASB issues an Accounting Standards Update (ASU), the resulting changes to a codification paragraph are usually effective at a future date.
In the meantime, the standard view of the codification displays the current version of the paragraph, followed by pending content (that includes the newly amended paragraph). Once pending content becomes effective for all entities, it replaces the current paragraph. And because different entities have different reporting period dates, the pending content will remain in place for a period of time that is sufficient for all entities.
There may be multiple pending content paragraphs following the current version of a paragraph and it can be time-consuming to read through all the pending content to determine what is effective for a specific entity.
To help streamline this process, the FASB Codification Pending Content System was introduced to allow users to create a profile to filter the Standard Codification view. To create a profile, users: (1) enter information about the entity; (2) determine which ASUs that FASB has identified as “special cases” are effective for their entity; and (3) choose the ASUs that they want to integrate via early adoption.
With the Pending Content System, pending content that is effective for a profile is “integrated” — the pending content replaces the current text. Pending content that is not effective is “not integrated” — the current text is not changed and pending content is hidden.
The Thomson Reuters Checkpoint Pending Content System adds additional functionality. Here are five benefits to using the FASB Codification Pending Content System on Checkpoint:
1. You can create multiple profiles and save them.
While FASB allows you to set up a profile, you cannot save the profile. On Checkpoint, you can create and save multiple profiles and you can easily toggle between any of your saved profiles and the Standard Codification view. On FASB’s site, you can revert to the Standard Codification view by clearing your preferences and leaving the profile inputs blank. However, you lose your profile settings and must start over to see the filtered view.
For example, if you are a CPA firm with both public companies and private companies as clients, some of which have adopted certain ASUs early, on Checkpoint’s Pending Content System you can save a profile for each of them. To easily see the guidance that is applicable to a specific company, just choose that company’s profile from a drop-down menu.
2. A saved profile can be quickly enabled from any codification section.
On Checkpoint, each Codification section offers quick access to existing profiles and the ability to create and save new profiles—all without navigating away from the Codification section. On FASB’s site, you must navigate away from the document you are reviewing to go to the profile settings page. Once you have created your profile, you need to start over to get to your document.
For example, you may be in a section on disclosure that contains pending content paragraphs with different effective dates for public and private companies. Your client is a private company that has not early adopted many ASUs. On Checkpoint, you can go to a drop-down menu located in that disclosure section and if you have already created a profile for that company, choose it from the list that will display; if you have not created the profile yet, create it right at that point—all without leaving the document. Let’s say that as you review the section with the profile enabled, you want to see how the guidance will change in one year. You can easily create a second profile for that company using the next year’s fiscal year beginning date. Once the new profile is created, you can toggle between the two, or back to the Standard View—again, all without leaving that disclosure section.
3. Notification of changes affecting a saved profile.
Since Checkpoint allows profiles to be saved, you need to know that a profile may have been affected by a newly issued ASU or some other change. When you attempt to enable a saved profile that has been affected by a change (such as a new ASU), you will see an alert that requires you to review your profile before it can be enabled.
For example, let’s say you created a profile for a public company that has early adopted many, but not all ASUs. A new ASU is issued. Before you can use that profile to filter the Standard View, you must determine whether to integrate that ASU. Checkpoint’s Pending Content System ensures that you will see and review the new ASU before using the profile.
4. Print or export the profile settings page.
Checkpoint allows you to print and export the user profile settings page. FASB allows a user to print the page but does not have an export function.
5. Profile information provided when printing a codification document with a profile enabled.
When you print a Checkpoint document, certain information (profile name, fiscal year beginning date, filing status, and period type) is displayed at the top of the document. This puts the resulting document in context; additionally, if there are profiles for multiple clients, the profile name lets you know immediately the client to whom this information pertains. Although FASB does print the document with the pending content system enabled, profile information is not provided.
Get detailed instructions for how to use the Pending Content System on Checkpoint.