Tuesday, January 25, 2011

FASB Chairman On Being Responsive To Need of Private Co's

During broad-ranging remarks about FASB's upcoming priorities in general, and efforts to be responsive to the needs of private company constituents and the users of their financial statements, FASB Chairman Leslie Seidman made several major points. Highlights below are based on my listening to the webcast of "2011 FASB Chairman's Outlook," moderated by BNA correspondent Denise Lugo. The points below are specific to the private company issue, but the vast majority of her remarks were on broad-ranging standard setting priorities of the FASB that are applicable to both public and private co's.

Regarding private companies:
  1. FASB Chairman Agrees With Blue Ribbon Panel's short-term recommendations: Seidman said she has seen a draft of the report/recommendations of the FAF-AICPA-NASBA sponsored Blue Ribbon Panel on Standard-Setting for Private Co's, [note: the report is expected to be delivered to the FAF by the end of this month]. She noted: "I personally agree with the panel's short/term recommendations," which FASB will "take steps to implement."
  2. Blue Ribbon Panel recommendation 'sends a strong message': Although she stopped short of saying she did not personally agree with the longer-term recommendation reached at the BRP's December meeting - to form a separate board under the FAF, alongside FASB and GASB, to focus on private co. accounting - she acknowledged that the panel's recommendation "sends a strong message … [that FASB is] not responsive enough.. [to private companies and their users]." In response to that view, she emphasized: "Our goal is to restore their confidence in our ability to address their concerns… in addition to outreach, we have assigned staff to ..[address] private co concerns [on each FASB project] ."
  3. FASB developing white paper: Additionally, Seidman noted that "we are developing a white paper on the unique needs of users of private company financial statements." She noted issues to be considered include cost-benefit, including the unique needs of smaller private companies. "She added, "we want to address their concerns, we want to be responsive...[and] do a better job," of addressing the concerns of private co's and the users of their financial statements.
  4. New FASB Board Member, Daryl Buck, Will Add To Private Co Perspective: Seidman added, "I think our new board member Daryl [Buck]," who she described later in in the FASB webcast (entitled "Chairman's Outlook") as having significant private company experience, "will be very effective in bringing the private co perspective to the table." (Seidman added that the other new FASB board member, Hal Schroeder, has a diverse background, most recently as a professional investor.)

The FASB Chairman's Outlook webcast held earlier today, will be archived on FASB's website. Registration is required to listen to the free webcast, and accompanying slides can be downloaded.

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