AICPA Supports FAF's Creation of Private Company Council

On May 23, today the Financial Accounting Foundation (FAF) announced its decision to make process and structural improvements by creating the Private Company Council (PCC). The PPC is based upon the body proposed last October by the FAF to set differences in U.S. generally accepted accounting principles ( GAAP), where appropriate, for privately held companies.
 
"With the news announced today by the FAF, we recognize and appreciate that the FAF has taken solid steps in the right direction regarding the Private Company Council. The AICPA is encouraged by this approach and awaits more of the details of the FAF decision.  We look forward to continuing to work together to effect meaningful changes in U.S. GAAP for private companies and the users of their financial statements," said Barry C. Melancon, CPA, CGMA, president and CEO of the American Institute of CPAs (AICPA).
 
The action the FAF has taken to date stems in large measure from the foundational work conducted by a blue ribbon panel formed in 2009 by the AICPA, the FAF and the National Association of State Boards of Accountancy (NASBA), which included lenders, investors and owners as well as preparers, auditors and regulators. After receiving the panel's report in January 2011, the FAF gathered input from stakeholders and released a proposal last fall. The vast majority of stakeholders agreed with the panel that action must be taken to make private company financial statements more relevant, less complex, and cost-beneficial. 
 
Today, the AICPA also announced plans to develop an "other comprehensive basis of accounting" (OCBOA) financial reporting framework to meet the needs of some privately held small- and medium-sized enterprises (SMEs) as well as the users of the financial statements of these entities. The SME OCBOA framework will be a less complicated and a less costly alternative system of accounting to U.S. GAAP for SMEs that do not need U.S. GAAP financial statements. 
 
"In addition to advocating for appropriate differences in U.S. GAAP to recognize the unique circumstances of the private company environment, we will be launching a complementary OCBOA financial reporting framework. The enhanced and simplified financial reporting framework will be a cost beneficial solution for smaller privately held entities that do not need to comply with U.S. GAAP," said Melancon.
 
"One-size U.S. GAAP does not fit all companies, especially smaller privately held businesses," said Gregory J. Anton, CPA, CGMA, chairman of the board of directors of the AICPA. "We recognize that the FAF has moved in the right direction and the AICPA will continue to be fully engaged with the FAF and the Private Company Council. While doing so, we will also use our resources and expertise to develop an enhanced OCBOA financial reporting framework that is objective, relevant and responsive to the concerns of preparers and users of small and medium private company financial statements where GAAP financial statements are not required."  
 
"We welcome the AICPA's support for the Private Company Council and for our efforts to improve the standard-setting process for private companies. We also believe that the AICPA's plan to develop a financial reporting framework for smaller private entities, which would be used as a form of OCBOA reporting where appropriate, is an important and complementary undertaking. Taken together, these actions demonstrate the commitment of both organizations to the private company financial reporting constituency," said Terri Polley, FAF President and CEO.
 
Related article:
 
Source: AICPA Press Release

 

You may like these other stories...

Accountants who specialize in forensic and valuation services point to electronic data analysis, or big data, as the most pressing issue they’ll face in the coming months, according to results of a new survey released...
Renaissance avoided more than $6 billion tax, report saysThe Senate Permanent Subcommittee on Investigations said on Monday that a Renaissance Technologies LLC hedge fund’s investors probably avoided more than $6...
Your 15-year-old may be tech-savvy enough to debug your computer, back-up data on your mobile devices, and help you stream episodes of Game of Thrones, but chances are you can’t expect them to display the same level of...

Upcoming CPE Webinars

Jul 23
We can’t deny a great divide exists between the expectations and workplace needs of Baby Boomers and Millennials. To create thriving organizational performance, we need to shift the way in which we groom future leaders.
Jul 24
In this presentation Excel expert David Ringstrom, CPA revisits the Excel feature you should be using, but probably aren't. The Table feature offers the ability to both boost the integrity of your spreadsheets, but reduce maintenance as well.
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.