swaitsandClaude Opus 5.5
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Read in the ASC basic view and vendored as short quotes with paragraph numbers (docs/spec/sources/fasb-asc.md). Depreciation: any systematic and rational allocation of cost less salvage (360-10-35-4); prepaids are current assets with no prescribed expensing method (340-10-05-4, 210-10-45-1/2); cash flows gross and classified three ways, owners' advances financing (230-10-45-7/10/14(b)/15(b)); a principal's revenue is gross (606-10-55-37B). Citation fixed: 230-10-45-14(b), not (2). Co-Authored-By: Claude Opus 5.5 <noreply@anthropic.com> Claude-Session: https://claude.ai/code/session_01GWVo7x3UHw5kwCUaWxiejX
60 lines
3.0 KiB
Markdown
60 lines
3.0 KiB
Markdown
# FASB Accounting Standards Codification: paragraphs read directly
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Read 2026-10-14 in the ASC's basic view (asc.fasb.org, Stephen's login).
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The Codification is copyrighted by the Financial Accounting Foundation,
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so this file keeps only short quotes and paraphrase, with the paragraph
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numbers to look up. Earlier ASC paragraphs were read through Deloitte's
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DART roadmaps (see README).
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## 360-10-35-4 (Property, plant, and equipment: depreciation)
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A productive facility's cost is spread over its expected useful life,
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allocated "as equitably as possible" to the periods that get its
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services. Depreciation distributes cost, "less salvage (if any)", over
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the estimated useful life "in a systematic and rational manner"; it is
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"a process of allocation, not of valuation." No method is prescribed.
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→ B-15: straight line, salvage never depreciated, partial months by
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days (each day of service bears the same cost) is one systematic and
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rational allocation.
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## 340-10-05-2, -05-4, -05-5 (Other assets and deferred costs: prepaids)
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Prepaid expenses are assets "typically used up or expire within the
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normal operating cycle," paid "in advance of their use or consumption"
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(05-4); examples include insurance, interest, rents, taxes, and
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advertising not yet received (05-5). The Subtopic covers only their
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nature (05-2): it prescribes no expensing method.
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→ B-16: a prepaid is an asset, expensed over the months it covers
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(a convention; the ASC is silent on the method).
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## 210-10-45-1, -45-2, -45-5 (Balance sheet: current assets and liabilities)
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Prepaid expenses are among current assets (45-1(g)), not because they
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become cash but because they would otherwise use current assets in the
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operating cycle (45-2). A total of current liabilities "shall be
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presented in classified balance sheets" (45-5): the rule applies when a
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balance sheet is classified.
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→ wanderbooks' balance sheet is unclassified (by element), which this
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Subtopic permits; a classified layout would need current/noncurrent
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account roles.
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## 230-10-45-7, -10, -12(a), -13(a), -14(b), -15(b) (Statement of cash flows)
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Gross amounts are "more relevant" than net (45-7). Cash receipts and
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payments are classified "as resulting from investing, financing, or
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operating activities" (45-10). Collections on, and disbursements for,
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loans the entity makes are investing (45-12(a), 45-13(a)). Proceeds of
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"other short- or long-term borrowing" are financing inflows (45-14(b));
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"repayments of amounts borrowed" are financing outflows (45-15(b)).
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→ B-14: money owners advance (Due to Shareholders) is borrowing, so
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financing, gross; a loan the company makes is investing, gross.
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## 606-10-55-36 through 55-38 (Revenue: principal or agent)
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An entity controlling the specified good or service before transfer is
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the principal (55-37) and recognizes revenue "in the gross amount of
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consideration" it expects (55-37B); an agent recognizes only its fee or
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commission (55-38).
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→ B-17: an app seller is the principal for its app, so its revenue is
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the gross price; the platform's commission is an expense.
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