FASB Meetings to Address Private Company Accounting Issues
FASB said it is hosting two public round-table meetings in October to discuss issues relating to existing private company accounting and reporting standards. The meetings, scheduled for Oct. 11 and Oct. 17, will discuss issues including accounting and disclosure requirements relating to variable-interest entities, interest rate swaps and level 3 fair value measurements.
FASB Chairman Leslie Seidman said in a press release that the purpose of the meetings is to “engage in a constructive dialogue about private company accounting and reporting issues on existing GAAP with a wide variety of stakeholders, including private companies, their CPA practitioners, and users of private company financial statements.
“The board and staff found that the two roundtables we held last fall were valuable forums for hearing firsthand from private company constituents about their concerns with existing GAAP,” she said. “Those roundtables provided the impetus for our efforts to develop a differential reporting framework for private companies and our project to simplify goodwill impairment assessments.”
A Blue Ribbon Panel sponsored by the AICPA, the Financial Accounting Foundation (FASB’s parent organization) and the National Association of State Boards of Accountancy met throughout 2010 and in January 2011 finalized recommendations on private company financial reporting. The two most significant Blue Ribbon Panel recommendations are that:
- A new, separate board with standard-setting authority be established under the oversight of the FAF. The board would coordinate activities with the FASB but not be subject to FASB approval.
- Changes and modifications be made to existing and future GAAP that recognize the unique needs of users of private company financial statements. All such changes would reside in the FASB Accounting Standards Codification.
The AICPA supports the panel’s main recommendations that change in financial reporting for private companies is long overdue and that a separate, autonomous standard-setting body is necessary for effective private company reporting to become a reality.
FAF Trustees discussed the panel’s recommendations at a February 2011 meeting and formed a Trustee Working Group in March to address accounting standard setting for nonpublic entities and gather public input.
The first FASB round-table meeting is scheduled for Oct. 11, 10 a.m. to 1 p.m. (CDT), at the Renaissance Chicago O’Hare Suites Hotel in Chicago. The second meeting is scheduled for Oct. 17, 9 a.m. to noon (PDT), in San Francisco (specific location to be determined).
The board is seeking private company stakeholders to participate. Any private company stakeholders or individual or organization representing those stakeholders that want to participate should submit an application by Sept. 13.
Anyone interested in observing a meeting must pre-register. Due to limited seating, no more than three observers from the same organization may attend. The sessions will be recorded for playback on FASB’s webcast archive.
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