244|CHATGPT – FASB codification expert

Challenges
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BYU Student Author: @Keanu_Gauthier
Reviewers: @Kylie_Larsen17 @Kaden_Sandberg
Estimated Time to Solve: 45 Minutes

We provide the solution to this challenge using:

  • ChatGPT

Need a program? Click here.

Overview
Are you ready to build an AI expert specialized in the FASB Codification? In this challenge, you’ll create a Custom GPT that serves as an expert in a specific topic within the FASB Accounting Standards Codification (ASC).

Your AI will help users understand, interpret, and apply the FASB Codification to real-world accounting problems. Through this challenge, you’ll gain hands-on experience in customizing AI responses, structuring accounting knowledge, and integrating regulatory guidance into an interactive assistant.

Instructions

You can choose any topic from the FASB Codification to specialize your GPT. Be specific—instead of selecting ASC 606 (Revenue Recognition) broadly, choose a narrowed section like ASC 606-10-20 or ASC 815-25-35. The more precise your topic, the more accurately your GPT can assist in understanding and applying the guidance.

Step 1: Access OpenAI’s GPT Customization Platform
Open ChatGPT.
Go to ChatGPT’s “Explore GPTs” section.
Click “Create a new GPT” to begin configuring your FASB Codification Expert.

Step 2: Define the Role of Your GPT
Go to the “Configure” tab of your new GPT and complete the following:
:white_check_mark: Name and Description: Clearly state that this AI is an FASB Codification expert specializing in your chosen topic (e.g., Fair Value Hedges – ASC 815-25).
:white_check_mark: Instructions for the AI:

  • The GPT specializes in analyzing and applying codification standards to answer complex accounting questions.
  • It should use reference materials such as FASB Codification, SEC comment letters, 10-K filings, and firm guidance.
  • The AI must cite specific ASC paragraphs when providing responses.

Step 3: Configure the AI’s Knowledge Processing Rules
In the “Instructions” section, define how the AI should process and structure responses:
:one: Define Processing Rules:
Cross-reference multiple sources before generating an answer.
Quote specific ASC paragraphs when explaining concepts.
Highlight SEC enforcement trends from comment letters.
Suggest disclosure best practices from 10-Ks and firm guidance.
:two: Set the AI’s Tone:
Professional (speaking as if addressing CPAs, auditors, and regulators).
Concise and authoritative (directly citing codification and SEC sources).
:three: Structure Responses Like This:

Example AI Response for Revenue Recognition (ASC 606):
:pushpin: Key Codification Reference:
ASC 606-10-25-1 states that revenue recognition occurs when control transfers.
:pushpin: SEC Comment Letter Trend:
SEC letters frequently question firms on performance obligation identification.
:pushpin: Company 10-K Example:
Microsoft’s 10-K (2023) describes recognizing SaaS subscription revenue over time.
:pushpin: Firm Guidance Suggestion:
PwC’s 2023 guide recommends detailed contract disclosures for variable consideration.

Step 4: Gather Knowledge Sources & Upload to Your GPT
Now that your GPT is configured, gather primary and secondary sources to ensure accurate, codification-backed responses.

FASB Codification Knowledge:

  • Log in to the FASB Codification website.
  • Navigate to the relevant codification section.
  • Select “Show All in One Page” and print/save as PDF or text file.

SEC Comment Letters:

  • Use the SEC Comment Letter Database.
  • Search by entering your codification reference (e.g., “ASC 815-25”).
  • Download PDF comment letters where companies respond to SEC staff inquiries.

10-K Filings Related to Comment Letters:

  • Find the company’s 10-K corresponding to its SEC comment letter.
  • Download the 10-K report where the accounting treatment is explained.

Big 4 / Firm Accounting Guides:

  • Search for publicly available technical guides from PwC, Deloitte, EY, and KPMG.
  • Download and upload PDF versions of hedge accounting or financial reporting guides.

Step 5: Upload Knowledge Sources to Your GPT
In the “Knowledge” section of GPT customization, upload all documents you gathered.
This allows the AI to reference real-world accounting guidance instead of relying on generic interpretations.

Step 6: Run Sample Queries to Test Accuracy
Test your AI with real-world accounting questions, such as:

  • “What are the main criteria for qualifying a fair value hedge under ASC 815-25?”
  • “How do SEC comment letters typically address hedge effectiveness assessments?”
  • “What are common hedge disclosure deficiencies in financial statements?”

Adjust your AI’s settings and uploaded knowledge if responses lack depth, reference incorrect sections, or need more clarity.

Step 7: Finalize and Publish Your AI Expert
Once the AI consistently delivers accurate, codification-backed responses, publish your FASB Codification Expert.
Share a summary of key insights from your AI’s responses, demonstrating how well it can interpret and apply complex accounting standards.
Submit the link to your GPT as an answer to this challenge!

Data Files

Here are some comment letters, 10-K, the FASB codification, and firm guides that I uploaded in the GPT I created specialized in Fair value hedges ASC 815-25.

FASB Codification ASC 815-25:

https://asc.fasb.org/815/25/showallinonepage

Comment letters:

10-K:

https://www.sec.gov/Archives/edgar/data/96223/000009622310000004/leucadia200910k.htm

Firm Guides:

PWC:

KPMG:

EY:

chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://www.ey.com/content/dam/ey-unified-site/ey-com/en-us/technical/accountinglink/documents/ey-frdbb1462-09-27-2024.pdf

Suggestions and Hints
  • When selecting a topic, choose one that has frequent SEC scrutiny to get valuable insights from comment letters.
  • Use perplexity.ai or similar AI research tools to find firm guidance and technical interpretations.
  • Make sure the AI does not generate vague answers—configure it to always cite authoritative sources.
  • Here is the description and instructions that I put in the configuration of my Fair Value hedges expert:

Description:

Fair Value Hedges Expert (ASC 815-25) helps users interpret and apply ASC 815-25 for fair value hedges. It cites codification, analyzes SEC comment letters, extracts 10-K disclosures, and incorporates Big 4 guidance. Responses are structured, authoritative, and tailored for accountants and auditors.

Instructions:

You are an expert in Fair Value Hedges (ASC 815-25) under the FASB Codification. You provide structured, codification-backed responses by:

:white_check_mark: Citing ASC 815-25 paragraphs to explain hedge designation, effectiveness assessment, and measurement.

:white_check_mark: Analyzing SEC comment letters to highlight common compliance issues.

:white_check_mark: Referencing 10-K disclosures to illustrate real-world hedge accounting applications.

:white_check_mark: Incorporating Big 4 firm guidance to suggest best practices.

How You Respond:

Always cite relevant ASC 815-25 paragraphs when explaining concepts.

Summarize SEC comment letter trends related to fair value hedges.

Provide real-world examples from 10-K reports.

Offer best practice recommendations based on Big 4 firm guidance.

Maintain a professional, authoritative, and structured tone in responses.

You cross-reference multiple sources before generating an answer, ensuring clarity, accuracy, and compliance with hedge accounting standards.

Solution

Here is the link of the GPT that I created specialized in Fair value hedges ASC 815-25:
ChatGPT - Fair Value hedges Expert
Solution Video: Challenge244|ChatGPT – FASB codification expert