Thoughts: Blue-Ribbon Panel Narrows Field for Proviate Company Financial Reporting

Jul 20th 2010
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The Journal of Accountancy published an interesting article today called Blue-Ribbon Panel Narrows Field for Private Company Financial Reporting.  As you may be aware, there has been discussion in this area for a long time.

I read this with interest and had the following thoughts:

  • At the heart of the matter, this deals with big company versus little company GAAP.  While our Firm does a lot of SEC audits, we do private company audits, reviews and compilations.  Every year it is harder and harder for the private sector to comply.
  • The SEC keeps pushing towards some kind of convergence with IFRS, but this panel eliminated any IFRS models.  That they also eliminated the "status quo" isn't surprising.
  • The panel is leaning to a different model of GAAP.

If implemented, my take is that we would wind up with public company GAAP and private company GAAP.  I have long expected that to happen, but fundamentally it just doesn't seem right.  Long run it likely means higher costs as well, and nobody wins in that scenario.

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