Guides
The FASB Accounting Standards Codification, Explained
The FASB Accounting Standards Codification (ASC) is the single, official source of authoritative U.S. GAAP for nongovernmental entities. Since July 1, 2009, it has organized every accounting standard into nine Areas, roughly 90 numbered Topics, and a consistent set of Subtopics and Sections. Instead of hunting across old FASB Statements, EITF consensuses, and staff positions, you cite one address, such as ASC 606-10-25-1.
What the FASB Codification is
The FASB Codification is a hierarchical database that consolidates authoritative nongovernmental U.S. GAAP into one place. The Financial Accounting Standards Board (FASB) maintains it at asc.fasb.org and updates it through Accounting Standards Updates (ASUs). Every entity that reports under U.S. GAAP, from public filers to private companies, relies on it.
Before 2009, GAAP lived in thousands of separate pronouncements: FASB Statements (SFAS), Interpretations, EITF Issues, FASB Staff Positions, AICPA Statements of Position, and more. Researchers often had to reconcile overlapping or conflicting documents. The Codification restructured all of that into one topical system without changing GAAP itself.
The Codification carries a single level of authority. Content inside it is authoritative; content outside it (with limited SEC and grandfathered exceptions) is not. This is the two-level GAAP hierarchy: authoritative and nonauthoritative.
The July 2009 single-source cutover
The FASB launched the Codification on July 1, 2009, as the single source of authoritative nongovernmental U.S. GAAP. FASB Statement No. 168 made it effective for interim and annual periods ending after September 15, 2009. On that date the Codification superseded all then-existing non-SEC accounting standards and rendered omitted, non-grandfathered literature nonauthoritative.
SFAS No. 168, “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles,” was the last standard issued in the old numbered-Statement format. It also superseded SFAS No. 162, which had described the prior four-level GAAP hierarchy.
The cutover changed how GAAP is written, not what it says. The FASB verified the Codification against the source pronouncements so that adoption did not alter existing accounting. Since then, the Board no longer issues numbered Statements; it amends the Codification directly through ASUs.
| Item | Before July 2009 | After July 2009 |
|---|---|---|
| Source format | SFAS, EITF, FSPs, AICPA SOPs, and more | One Codification |
| GAAP hierarchy | Four levels (a through d) | Two levels: authoritative, nonauthoritative |
| How GAAP changes | New numbered Statements | Accounting Standards Updates (ASUs) |
| Governing standard | SFAS 162 | SFAS 168 |
| Citation style | “SFAS No. 13” | “ASC 606-10-25-1” |
The ASC structure: Areas, Topics, Subtopics, Sections
The Codification uses five levels: Areas, Topics, Subtopics, Sections, and Paragraphs. Areas are the broadest grouping and set the leading digit of the Topic number. Topics collect related guidance, Subtopics narrow it by type or scope, and Sections split each Subtopic into standard content types like recognition and disclosure.
The nine Areas
Areas organize the Codification at the highest level, and the Area determines a Topic’s number range. There are nine Areas, numbered by their leading hundreds digit, plus a separate Master Glossary.
| Area | Topic range | Example Topic |
|---|---|---|
| General Principles | 105 to 199 | 105 Generally Accepted Accounting Principles |
| Presentation | 205 to 299 | 210 Balance Sheet |
| Assets | 305 to 399 | 330 Inventory, 360 Property, Plant, and Equipment |
| Liabilities | 405 to 499 | 450 Contingencies |
| Equity | 505 to 599 | 505 Equity |
| Revenue | 605 to 699 | 606 Revenue from Contracts with Customers |
| Expenses | 705 to 799 | 740 Income Taxes |
| Broad Transactions | 805 to 899 | 805 Business Combinations, 842 Leases |
| Industry | 905 to 999 | 942 Financial Services, Depository and Lending |
Topics and Subtopics
Topics are three-digit groupings of related guidance, such as ASC 842 for leases or ASC 740 for income taxes. There are roughly 90 Topics. Subtopics are two-digit subsets that narrow a Topic by type or scope. Every Topic has a “10 Overall” Subtopic; additional Subtopics carry higher numbers.
For example, within ASC 842 (Leases), Subtopic 842-20 covers lessee accounting and 842-30 covers lessor accounting. The Subtopic tells you which slice of the Topic applies to your fact pattern.
Sections and Paragraphs
Sections split each Subtopic into standardized content types, and the same Section numbers mean the same thing across every Subtopic. This is why researchers can jump straight to, for instance, the disclosure Section (50) of any Subtopic. Paragraphs are the most granular level and hold the actual guidance.
| Section | Content |
|---|---|
| 00 | Status |
| 05 | Overview and Background |
| 10 | Objectives |
| 15 | Scope and Scope Exceptions |
| 20 | Glossary |
| 25 | Recognition |
| 30 | Initial Measurement |
| 35 | Subsequent Measurement |
| 40 | Derecognition |
| 45 | Other Presentation Matters |
| 50 | Disclosure |
| 55 | Implementation Guidance and Illustrations |
| 60 | Relationships |
| 65 | Transition and Open Effective Date Information |
| 70 | Grandfathered Guidance |
| 75 | XBRL Elements |
How ASC citations work
An ASC citation is a four-part address: Topic, Subtopic, Section, and Paragraph, written as ASC XXX-YY-ZZ-PP. Reading ASC 606-10-25-1, the 606 is the Topic (Revenue from Contracts with Customers), 10 is the “Overall” Subtopic, 25 is the Recognition Section, and 1 is the specific Paragraph. The address points to one precise location in GAAP.
Because Section numbers are consistent, the citation itself signals the type of guidance. A “-50-” citation is a disclosure requirement; a “-25-” citation is a recognition rule. That lets a reader anticipate the content before opening the paragraph.
SEC content that the FASB includes for convenience uses an “S” before the Section number, such as ASC 606-10-S99-1. This flags material derived from SEC sources (Regulations S-X and S-K, Staff Accounting Bulletins, and similar) rather than FASB guidance, and it is authoritative only for SEC registrants.
Numbered lists of the citation logic:
- ASC signals the Codification.
- Topic (three digits) names the subject, for example 842 for leases.
- Subtopic (two digits) narrows scope, for example 20 for the lessee.
- Section (two digits) identifies the content type, for example 30 for initial measurement.
- Paragraph points to the exact guidance, for example 842-20-30-1.
How the Codification stays current
The FASB no longer publishes numbered Statements. It changes GAAP by issuing Accounting Standards Updates, each numbered by year and sequence (for example, ASU 2016-02, which created ASC 842). An ASU is a transient document: it explains the amendment and its basis for conclusions, then its instructions are woven into the Codification’s affected paragraphs.
Once an ASU’s amendments are incorporated, the Codification, not the ASU, is the authoritative source. The ASU records what changed and when it takes effect, but you cite the resulting ASC paragraph. Ledgerism tracks the pace and adoption of these updates in the FASB Standards Report 2026.
Frequently asked questions
What is the FASB Accounting Standards Codification?
The FASB Accounting Standards Codification is the single, official source of authoritative nongovernmental U.S. GAAP, maintained by the FASB at asc.fasb.org. It reorganizes thousands of prior pronouncements into nine Areas and roughly 90 numbered Topics. Since July 1, 2009, entities reporting under U.S. GAAP cite the Codification rather than legacy standards.
When did the FASB Codification become effective?
The FASB launched the Codification on July 1, 2009. Under FASB Statement No. 168, it became the single source of authoritative nongovernmental U.S. GAAP for interim and annual periods ending after September 15, 2009. On that date it superseded all then-existing non-SEC accounting standards, and omitted non-grandfathered literature became nonauthoritative.
How do you read an ASC citation like ASC 606-10-25-1?
An ASC citation has four parts: Topic, Subtopic, Section, and Paragraph. In ASC 606-10-25-1, 606 is the Topic (Revenue from Contracts with Customers), 10 is the Overall Subtopic, 25 is the Recognition Section, and 1 is the Paragraph. Because Section numbers are standardized, a “-25-” citation always points to recognition guidance.
What are the nine Areas of the Codification?
The nine Areas are General Principles (100s), Presentation (200s), Assets (300s), Liabilities (400s), Equity (500s), Revenue (600s), Expenses (700s), Broad Transactions (800s), and Industry (900s). The Area sets the leading digit of each Topic number, so ASC 330 (Inventory) sits in Assets and ASC 606 sits in Revenue.
Did the Codification change U.S. GAAP?
No. The cutover changed how GAAP is organized and cited, not the underlying accounting. The FASB verified the Codification against the source pronouncements so that adoption did not alter existing requirements. What changed is the structure (one topical database) and the hierarchy, which became two levels: authoritative and nonauthoritative.
What is an Accounting Standards Update?
An Accounting Standards Update (ASU) is how the FASB changes the Codification. Each ASU is numbered by year and sequence, for example ASU 2016-02, which created ASC 842 on leases. The ASU explains the amendment, then its instructions are incorporated into the affected Codification paragraphs. After incorporation, you cite the ASC paragraph, not the ASU.
What does the “S” mean in a citation like ASC 606-10-S99?
The “S” prefix marks SEC content that the FASB includes in the Codification for convenience, such as material from Regulations S-X and S-K and Staff Accounting Bulletins. It appears before the Section number, as in ASC 606-10-S99-1. This content is authoritative for SEC registrants but sits apart from the FASB’s own guidance.
Related reading: ASC 606 Revenue Recognition and the 5-step model, ASC 842 Lease Accounting, and ASC 740 Income Tax Accounting.
Reviewed by The Ledgerism Editorial Team. Last reviewed: July 2026.