Private company standards
After receiving more than 7,300 comment letters and participating in four roundtable discussions, the Financial Accounting Foundation (FAF) appears prepared to decide on one of the most pressing U.S. financial reporting issues.
During the open portion of its board meeting—from about 10:10 a.m. to 12:15 p.m. on May 23 in Washington—the FAF trustees are scheduled to discuss a plan for the structure for private company standard setting.
The FAF has proposed creating a Private Company Standards Improvement Council (PCSIC) that would recommend U.S. GAAP deviations for private companies, subject to the approval of FASB. The plan met resistance from the AICPA and others who said a board with the authority to decide private company standards should be independent of FASB.
Terri Polley, who chairs the FAF, said May 10 that she plans to provide the FAF trustees information on feedback from constituents as well as recommendations on how to proceed. She expects the recommendations to come to a vote at the meeting.
She told FASB’s Small Business Advisory Committee and Private Company Financial Reporting Committee that the FAF trustees want to ensure that the private company voice is heard and also recognize changes that have been made at FASB to work with private companies over the last several years.
“They’re trying to balance what they believe is best for financial reporting,” Polley said, “and in that regard I think they are just trying to come out with the best answer.”
Insurance on agenda for FASB, IASB
In their continuing effort to reach convergence on a number of topics, FASB and the IASB are scheduled to meet today through Friday in Norwalk, Conn.
A number of elements of the boards’ ongoing project on insurance contracts will be the subject of a significant portion of the discussion. The discount rate that should be used when discounting expected losses in the “three-bucket” model of impairment of financial instruments also will be discussed.
A webcast of the meetings can be accessed through the IASB website.