It might be the Financial Accounting Standard Board's toughest challenge yet. After 35 years and thousands of rules and amendments, FASB has released its first attempt to simplify the more than 25,000 pages of rules and guidelines into an easy to use, single source document. In January FASB released the initial version of its accounting standards codification, a four-year undertaking that, if approved, will become the single source of authoritative U.S. GAAP in early 2009. The Web-based codification is currently in the review stage, but FASB is hoping any and all users will give the new system a try and comment on its usefulness as well as any drawbacks. The feedback (more than 300 comments so far) has been generally supportive, although there are concerns. "This is something that should have been done some time ago," says Charles Mulford, accounting professor at Georgia Tech's college of management. "Presently, any time you want to look up the accounting treatment for a transaction you have no single source to go to, and so this will really improve just abiding by accounting rules and knowing what the rules are."

"The primary emphasis is that this is a Web-based tool," says Tom Hoey, director of the codification project at FASB, who adds that the Website's topical structure will let corporate finance staff and other compliance specialists see at a single glance all authoritative guidance on a particular issue. So, if a company is considering a merger and needs to know the bottom line when it comes to current accounting for business combinations, a few clicks of a mouse will lead to a distillation of all key guidance. That should cut out many hours of painful checking through various rules and amendments approved through the years. The codification site also provides separate guidelines from the Securities and Exchange Commission (SEC) on various accounting standards through the year, although only those that deal strictly with accounting issues are included. "The SEC has been actively involved in the process," says Hoey.

One concern raised by Mulford is to what extent the Web-based codification will become outdated once the process of combining international accounting standards gets under way in the coming years. But even there he thinks the process will be easier than under the old FASB system. "That could be a monkey wrench…but codification should make combining those standards easier."