NORWALK, Conn.--(BUSINESS WIRE)--The Private Company Council (PCC) today added three projects to its formal agenda and voted, along with the Financial Accounting Standards Board (FASB), to seek additional public comment on the FASB’s staff paper on a proposed private company decision-making framework.
“Today, the PCC made significant progress in its effort to improve financial reporting for private companies by adding three projects to the agenda, moving forward to re-expose the proposal on the private company decision-making framework, and seeking new research on stock-based compensation and development stage enterprises”
In its second public meeting, the PCC voted to add the following items to its agenda:
- Consolidating variable interest entities, specifically when applied to related party arrangements, as referenced in Accounting Standards Codification (ASC) Topic 810, Consolidation (formerly FIN 46(R) and FAS 167)
- Accounting for “plain vanilla” interest rate swaps with single counterparties, which are used to convert variable interest rates on loans to fixed interest rates as referenced in ASC Topic 815, Derivatives and Hedging (formerly FAS 133)
- Recognizing and measuring various identifiable intangible assets acquired in business combinations, including the use of Level 3 fair value measurements and the disclosures associated with them, as referenced in ASC Topic 805, Business Combinations, and ASC Topic 350, Intangibles—Goodwill and Other (formerly FAS 141(R) and FAS 142).
In their first joint standard-setting activity, the PCC and the FASB voted to seek additional public input on a proposed private company decision-making framework. The framework outlines criteria to determine whether and in what circumstances it is appropriate to adjust financial reporting requirements for private companies following U.S. Generally Accepted Accounting Principles (GAAP).
The decision-making framework is intended to help the PCC and the FASB identify opportunities to enhance the relevance to users and reduce the cost and complexity of preparing private company financial statements in accordance with U.S. GAAP. The proposal is expected to be re-exposed in March, with a 90-day comment period.
“Today, the PCC made significant progress in its effort to improve financial reporting for private companies by adding three projects to the agenda, moving forward to re-expose the proposal on the private company decision-making framework, and seeking new research on stock-based compensation and development stage enterprises,” said PCC Chairman Billy M. Atkinson.
The PCC also directed the FASB staff to develop agenda research memoranda on two additional topics: Stock-based compensation and development stage enterprises. The PCC directed the staff to continue research on interest rate swaps with more than one counterparty or lending arrangement. The PCC did not formally add to its agenda accounting for uncertain tax positions (as referenced in ASC Topic 740, income tax, formerly FIN 48). Members did not identify specific practice issues that require immediate attention. Members acknowledged the desire to continue to solicit feedback from stakeholders on this issue.
The PCC also continued its discussion of the FASB’s project on definition of a nonpublic entity and provided input to the FASB on other projects, including going concern, revenue recognition, and the Emerging Issues Task Force’s project on recognition of new accounting basis (pushdown) in certain circumstances.
All PCC meetings will be archived on the FAF website.
The PCC was established by the FAF Board of Trustees of to work with the FASB to determine whether and when to modify U.S. Generally Accepted Accounting Principles (GAAP) for private companies. For more information on the PCC, please visit the FAF website or read the Establishment of the Private Company Council Final Report.
About the Financial Accounting Foundation
The FAF is responsible for the oversight, administration, and finances of both the Financial Accounting Standards Board and its counterpart for state and local governments, the Governmental Accounting Standards Board. The FAF also is responsible for selecting the members of both Boards and their respective Advisory Councils.
About the Financial Accounting Standards Board
Since 1973, the Financial Accounting Standards Board has been the designated organization in the private sector for establishing standards of financial accounting and reporting. Those standards govern the preparation of financial reports and are officially recognized as authoritative by the Securities and Exchange Commission and the American Institute of Certified Public Accountants. Such standards are essential to the efficient functioning of the economy because investors, creditors, auditors, and others rely on credible, transparent, and comparable financial information. For more information about the FASB, visit our website at www.fasb.org.