What it means
Earlier FASB requirements appeared in numbered standards statements, and accountants can encounter those references in old financial statements, technical memos and academic discussions. A statement number identifies a particular pronouncement, not a complete current rulebook.
Later statements could amend or replace earlier requirements, so a historical reference needs a status check even when the cited text is accurately quoted. FASB Statement 168 explains the change to the Codification, making it the source of authoritative GAAP recognised by FASB for nongovernmental entities within its scope, and it also recognised SEC rules and interpretive releases as authoritative sources for SEC registrants.
The transition superseded then-existing non-SEC accounting and reporting standards as separate sources, but that does not mean every underlying accounting requirement disappeared. Relevant guidance was organised into the codified system rather than remaining authoritative solely under its old statement number.
The distinction between a rule and its former publication matters, because a transaction may still follow concepts developed in an earlier standard but the preparer should locate the current codified text. The historical document alone cannot establish whether later changes affect today's treatment.
Statement 168 states that FASB would no longer issue new standards in the form of Statements, Staff Positions or Emerging Issues Task Force Abstracts, so Accounting Standards Updates became the publication route for changes, and those updates are not authoritative in their own right but update the Codification and explain the changes. This differs from a Statement of Financial Accounting Concepts, which discusses fundamental objectives and reporting ideas without itself establishing GAAP, so similar acronyms should not blur standards requirements with the conceptual framework supporting their development.
It also differs from an APB Opinion or Accounting Research Bulletin, which came from predecessor bodies and belong to different stages of US standard-setting history. Historical lineage does not give every older publication independent current authority.
Scope matters geographically, as SFAS references belong to US accounting history, not a universal international numbering system, and an entity reporting under another framework should identify that framework's requirements rather than assume a familiar US citation governs. A legacy financial statement still needs context, because its reporting date and applicable rules can explain why an old policy used a statement number, and reading it with today's framework is useful for comparison but should not silently rewrite what was required then.
Contract references create another issue, since an agreement may cite an older standard in defining a financial measure, and whether that reference updates automatically depends on the agreement and applicable interpretation, not simply on the accounting literature's transition. For research, the old statement can be valuable, because its background and basis for conclusions can show which problem FASB was addressing, which helps explain the rule's purpose without replacing current requirements or proving a proposed accounting treatment.
For a non-finance manager, ask finance to translate old citations into current applicable guidance and keep the historical explanation separate from the governing policy decision. A precise statement number can look authoritative while still being an incomplete basis for today's reporting.
In practice
Real-world examples.
Example
A fictional acquisition team reads an old accounting memo citing an SFAS. The accountant traces the requirement to the current Codification and later amendments. It does not approve today's policy solely because the old memo was correct when written.
Example
A financing agreement defines a measure using a historical statement reference. Counsel and finance check the contract's intended treatment. The accounting transition does not alone decide how that negotiated definition changes.
Example
A trainee confuses a concepts statement with a standards statement. The reviewer separates reporting principles from authoritative requirements. Both can be useful reading, but they have different functions.
Formula
Calculation
There is no SFAS arithmetic formula. An illustrative citation check records the old statement, the corresponding current topic, any later amendments and the transaction's applicable reporting period.
A matched citation is only one step. The entity's framework, scope, facts and effective-date requirements still need review before the accounting entry is approved.
For example, a fictional memo cites an old statement for a $200,000 lease transaction. The reviewer records the statement number, finds the current Codification topic, checks later amendments and confirms the reporting period before approving the entry. The old number alone would not support the $200,000 entry.Case study
Seen in the real world.
Fictional case study: Rowan Manufacturing copies a decades-old reporting policy into a new transaction memo. It cites a standards statement without checking subsequent changes. Finance locates the current topic and reviews later amendments and applicability.
It uses the old statement only to explain the policy's origin. The revised memo separates historical background from the governing requirements. Management can understand the lineage without treating the archived citation as proof of current compliance.
Watch out
Common mistakes.
- Treating an old SFAS number as complete current authoritative guidance.
- Assuming Codification removed every underlying requirement rather than changing its source.
- Confusing standards statements, concepts statements and Accounting Standards Updates.
Questions
People also ask.
Does FASB still issue new SFAS publications?
Statement 168 replaced that publication route with Accounting Standards Updates.
Are old statements useless?
No. They can explain history and reasoning, but current treatment needs applicable current guidance.
Is a concepts statement the same thing?
No. Concepts statements explain fundamental ideas and do not themselves establish GAAP.
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