FASB Issues Three PCC Proposals for Public Comment

By Jason Bramwell
 
The Financial Accounting Standards Board (FASB) on July 1 issued for public comment three accounting proposals from the Private Company Council (PCC) in response to concerns raised by private company stakeholders about the complexity of certain aspects of US Generally Accepted Accounting Principals (GAAP).
 
Stakeholders are asked to provide comments on the three exposure drafts by August 23 (see sidebar).
 

How to Provide Comments on Proposals

Private company stakeholders can make comments on the three accounting proposals by using the electronic feedback form available on the FASB website or by e-mail to director@fasb.org, referencing File Reference No. PCC-13-01A, No. PCC-13-01B, or No. PCC-13-03 by August 23.
 
Written comments should be addressed to:
Technical Director
File Reference No. PCC-13-01A, No. PCC-13-01B, or No. PCC-13-03
Financial Accounting Standards Board
401 Merritt 7, PO Box 5116
Norwalk, CT 06856-5116
 
The PCC was established in 2012 by the Financial Accounting Foundation (FAF) to work with the FASB to determine whether and when to modify US GAAP for private companies.
 
The three proposals involve accounting for intangible assets acquired in business combinations, goodwill, and certain types of interest rate swaps.
 
"These proposals are intended to continue to provide users of private company financial statements with decision-useful information while reducing the costs and complexity for preparers in valuing and accounting for intangible assets acquired in business combinations, goodwill, and certain types of interest rate swaps," new FASB Chairman Russell Golden said in a written statement. "We look forward to receiving feedback on the effectiveness of the proposals from private company stakeholders."
 
The first proposal – derived from PCC Issue No. 13-01A, Accounting for Identifiable Intangible Assets in a Business Combination – modifies the requirement for private companies to separately recognize fewer intangible assets acquired in a business combination. 
 
The second proposal – derived from PCC Issue No. 13-01B, Accounting for Goodwill Subsequent to a Business Combination – would permit amortization of goodwill and a simplified goodwill impairment model. The FASB defines goodwill as "the residual asset recognized in a business combination after recognizing all other identifiable assets acquired and liabilities assumed."
 
The third proposal – derived from PCC Issue No. 13-03, Accounting for Certain Receive-Variable, Pay-Fixed Interest Rate Swaps – would give private companies, other than financial institutions, the option to use two simpler approaches to accounting for certain types of interest rate swaps that are entered into by a private company for the purpose of economically converting its variable-rate borrowing to a fixed-rate borrowing.
 
The effective dates will be determined after the FASB and the PCC consider stakeholder feedback on the exposure drafts. Following receipt of public comments, the FASB and the PCC will discuss feedback at the PCC meeting from September 30 to October 1. The PCC will then consider changes to the original proposals and take a final vote before submitting to the FASB for a final decision on endorsement.
 
During the exposure period, FASB staff will research and analyze whether the proposals should be extended to public companies or not-for-profit organizations, which will be discussed with the board at a future meeting.
 
Related article:

You may like these other stories...

School tax breaks get House support as Democrats objectRichard Rubin of Bloomberg reported that the House of Representatives on Thursday voted to expand and simplify tax breaks for education as Republicans continue to pass...
The Financial Accounting Standards Board (FASB) has relaunched its technical agenda web page, which Chairman Russell Golden said will inform visitors at a glance on where any given FASB project stands, the steps it took to...
Tax accounting to be simplified for money-market fundsThe US Securities and Exchange Commission (SEC) voted 3-2 on Wednesday for sweeping changes to institutional money-market funds, Emily Chasan, senior editor of...

Upcoming CPE Webinars

Jul 31
In this session Excel expert David Ringstrom helps beginners get up to speed in Microsoft Excel. However, even experienced Excel users will learn some new tricks, particularly when David discusses under-utilized aspects of Excel.
Aug 5
This webcast will focus on accounting and disclosure policies for various types of consolidations and business combinations.
Aug 20
In this session we'll review best practices for how to generate interest in your firm’s services.
Aug 21
Meet budgets and client expectations using project management skills geared toward the unique challenges faced by CPAs. Kristen Rampe will share how knowing the keys to structuring and executing a successful project can make the difference between success and repeated failures.