FASB Issues Three PCC Proposals for Public Comment | AccountingWEB

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:
Wait, there's more!
There's always more at AccountingWEB. We're an active community of financial professionals and journalists who strive to bring you valuable content every day. If you'd like, let us know your interests and we'll send you a few articles every week either in taxation, practice excellence, or just our most popular stories from that week. It's free to sign up and to be a part of our community.
Premium content is currently locked

Editor's Choice

As part of our continued effort to provide valuable resources and insight to our subscribers, we're conducting this brief survey to learn more about your personal experiences in the accounting profession. We will be giving away five $50 Amazon gift cards, and a $250 Amazon gift card to one lucky participant.
This is strictly for internal use and data will not be sold
or shared with any third parties.