A blue-ribbon panel tasked with providing recommendations on the future of U.S. accounting standards for private companies by the end of this year is seeking public feedback on a series of questions that will assist the panel in discussing how accounting standards can best meet the needs of U.S. users of private company financial statements and making recommendations thereon. The panel is reaching out to users of private company financial statements, as well as preparers and practitioners.
The questions, which were posted on fasb.org Thursday, are:
Users (e.g., lender, surety, investor, owner) only:
- a) Briefly describe how you use GAAP financial statements in your decision-making concerning private companies.
b) Tell us about any issues or concerns that you may have with respect to the relevance of the information contained in those statements. Please be as specific as possible in your answer.All respondents:
- a) Tell us about any issues or concerns you have with current U.S. GAAP accounting standards as those standards apply to private company financial statements.
b) Are those issues or concerns confined to one or more specific standards, or are they more systemic?
c) Do you believe that those issues or concerns are largely confined to private companies, or are they broader? - What short-term and/or long-term actions do you believe are necessary to address those issues or concerns?
- a) To what extent, if any, would an SEC requirement for public companies to adopt IFRS at a date certain affect your answers above? Why?
b) To what extent, if any, would other outside factors affect your answers above? Which factors and why? - Is there any other input that you'd like to convey to the panel?
- Do these responses represent your individual views or are they submitted to represent the views of the organization with which you are associated?
If you or your organization would like to submit responses to the questions, e-mail them to Tim Woo at tswoo@fasb.org, no later than Sept. 15. All submissions will be considered public and will be accessible via FASB’s website. All respondents also will be asked to fill out a questionnaire relating to information about their company, but the information on that questionnaire will not be posted to the website.
A summary of the responses received through Sept. 15 will be prepared and distributed to panel members and participating observers. The summary will be included as part of the observer notes (a publicly available meeting handout) for the panel’s next meeting, which will take place Oct. 8 at the AICPA’s New York City office.
At its last meeting on July 19 the 18-member panel weighed in on seven alternative models for private company financial reporting, eliminating models that were based on IFRS and a model that effectively would have maintained the status quo.
All of the remaining models under consideration by the panel would result in differences in GAAP for private companies, where warranted, compared with GAAP for public companies.
The three primary models that are advancing for more consideration are:
- U.S. GAAP with Exclusions for Private Companies—with enhancements
- U.S. GAAP—Baseline GAAP with Public Company Add-Ons
- Separate, Stand-Alone GAAP Based on Current U.S. GAAP
More information about that meeting can be found in the JofA’s online story, “ Blue-Ribbon Panel Narrows Field for Private Company Financial Reporting.”
The panel is part of a joint effort by the AICPA; the Financial Accounting Foundation, FASB’s parent organization; and the National Association of State Boards of Accountancy. Panel chairman Rick Anderson, chairman and CEO of Moss Adams LLP and a current FAF board member, said he would like any recommendations to be ironed out by the panel’s Dec. 10 meeting. The recommendations will then be presented to FAF.
Archived audio of previous panel meetings and background materials are also available on fasb.org.
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