PCC votes to remove effective dates

If endorsed, the change would create an unconditional first-time option for GAAP alternatives.

The Private Company Council (PCC) voted to remove the effective dates from the four accounting standards updates that it has created to provide GAAP alternatives for private companies.

FASB will consider endorsement of the PCC's decision. If FASB endorses it, a standard removing the effective dates would be issued.

Removing the effective dates would permit private companies to forgo a preferability assessment the first time they elect the accounting alternatives contained in those updates.

All four standards containing GAAP alternatives for private companies were issued in 2014. They are: Accounting Standards Update (ASU) No. 2014-02, Intangibles—Goodwill and Other (Topic 350); ASU No. 2014-03, Derivatives and Hedging (Topic 815); ASU No. 2014-07, Consolidation (Topic 810); and ASU No. 2014-18, Business Combinations (Topic 805).

FASB's preferability requirement in Topic 250, Accounting Changes and Error Corrections, permits the use of an allowable alternative accounting principle on the basis that it is preferable.

But advocates of an unconditional first-time option for the PCC alternatives have said private companies sometimes experience changes in circumstances that would have led them to adopt a PCC alternative if those changes had occurred before the effective date.

SPONSORED REPORT

Keeping client information safe in an age of scams and security threats

A look at the Dirty Dozen tax scams and ways to protect taxpayer information.

TAX PRACTICE CORNER

More R&D tax help

"Can I use the R&D credit?" PATH Act enhancements make the credit more attractive to a wider range of taxpayers.

QUIZ

Learn to choose between ‘who’ and ‘whom’

Writers can stumble over who and whom (or whoever and whomever). If you write for business, this quiz can help make your copy above reproach.