Generally Accepted Accounting Principles

ASC 105 establishes the FASB Accounting Standards Codification as the single source of authoritative U.S. GAAP for nongovernmental entities, supplemented for SEC registrants by SEC rules, interpretive releases, SABs and staff announcements (105-10-05-1, 105-10-10-1). Its single subtopic, 105-10, sets the hierarchy for gaps: when no authoritative guidance addresses a transaction, an entity first considers authoritative guidance for similar transactions by analogy (unless analogy is prohibited), and only then turns to nonauthoritative sources such as FASB Concepts Statements, IFRS, AICPA Issues Papers, TPAs, textbooks and prevalent industry practice, weighted by relevance, specificity, authority of the author, and use in practice (105-10-05-2, 105-10-05-3). The key idea is that everything outside the Codification is nonauthoritative — Accounting Standards Updates merely amend the Codification and are not themselves authoritative — subject to narrow grandfathered guidance for ongoing transactions such as poolings of interests, pension transition assets/obligations, and pre-Statement 114 troubled debt restructurings (105-10-05-5, 105-10-70-2). The Codification need not be applied to immaterial items (105-10-05-6).

Subtopics

1. 10Overall23 ¶

   ASC 105-10 establishes the FASB Accounting Standards Codification as the single source of authoritative U.S. GAAP for nongovernmental entities, with SEC rules and interpretive releases (plus SABs and staff announcements) also authoritative for SEC registrants. Everything not in the Codification (other than grandfathered guidance) is nonauthoritative. When no authoritative guidance addresses a transaction, an entity looks first by analogy to authoritative guidance for similar transactions (unless analogy is prohibited) and only then to nonauthoritative sources such as Concepts Statements, IFRS, and prevalent industry practice.

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