The Texas Society of Certified Public Accountants (TSCPA) Executive Board has adopted a resolution in support of the implementation of a new GAAP model for private companies.
TSCPA officials said that the society has long supported the development of accounting standards that meet the needs of privately held companies in the United States, especially those that are the backbone of the economy, and are not adequately served through current GAAP financial statements.
The TSCPA encourages the implementation of a different GAAP model for private companies as determined by a separate private company accounting standards board, and urges all TSCPA members to communicate with the Financial Accounting Foundation (FAF) to support its formation.
In addition, The TSCPA Executive Board fully supports and expresses appreciation to the Blue Ribbon Panel formed by the American Institute of Certified Public Accountants, FAF, and the National Association of State Boards of Accountancy for its recent recommendation that the FAF create a separate board to establish private company accounting standards.
FAF’s Board of Trustees is scheduled to discuss the report and recommendations of the Blue Ribbon Panel at a meeting on February 15. Passing of the report from the panel to FAF represents a significant step in the process to bring historic change to private company financial reporting, making it more meaningful for owners, lenders, investors, and other users of private company financial statements.
FAF is expected to issue a proposal for public comment this spring. CPAs are vitally important in transforming the panel’s recommendations into reality. To change private company financial reporting, TSCPA encourages CPAs to provide comment letters in support of the panel’s recommendations and urges small business owners, lenders/bankers, investors (such as private equity and hedge fund managers), and other users to respond to FAF’s proposal as well.