Provide recommendations on the future of standard setting for private companies, including whether separate, standalone accounting standards for private companies are needed. Members of the panel will represent a cross-section of financial reporting constituencies, including lenders, investors and owners as well as preparers, auditors, and regulators.The chairman and members of the panel will be named in January. Read the joint press release for further details.
FASB Advisory Committees Discuss Issue
We reported on December 4 in FASB Advisory Committee Calls for FAF To Consider Private Company GAAP that the FASB-AICPA Private Company Financial Reporting Committee (PCFRC) had formally called on the FAF (through a letter sent to the FAF in November) to take the lead in considering what the future of financial reporting should be for private companies, suggesting five general models to consider, ranging from creating a new set of standalone private company U.S. GAAP - similar to the recent decision in Canada - or to make a policy decision as to U.S. private companies following IFRS or IFRS for Small and Medium Sized Entities. (The AICPA recognizes the IASB as a standard-setter for purposes of audited financial reports, and private companies that are not issuers (i.e. not subject to SEC regulation) are not dependent on any decision by the SEC with respect to SEC's IFRS Roadmap for public companies. Some private companies in the U.S. are beginning to consider the potential pros and cons of switching to IFRS for SMEs, issued by the IASB earlier this year as a simplified, (250-page), self contained set of IFRS, vs. full IFRS.
Noted in our Dec. 4 post were PCFRC's recommendations, as well as a separate recommendation made by FASB Small Business Advisory Committee (SBAC) member Andy Thrower. Additional information is provided in a subsequent comment that Thrower posted on our blog (scroll down to view the comment).
FEI's Committee on Private Companies-Standards
FEI's Committee on Private Companies - Standards (CPC-S), chaired by William Koch, VP and CFO, Development Dimensions International, monitors developments relating to private company financial reporting, and responds to proposals issued by the Financial Accounting Standards Board and International Accounting Standards Board on behalf of FEI members from private companies. If you are an FEI member interested in joining CPC-S (or if you are not currently an FEI member but meet FEI's eligibility criteria and would be interested in joining FEI and CPC-S), please contact firstname.lastname@example.org.
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