Three years after its inception, the Private Company Council (PCC) will undergo a public evaluation of the job it is doing in looking out for the interests of private companies in accounting standards.
The board of trustees of the Financial Accounting Foundation (FAF) on Thursday issued a request for comment, with responses to be evaluated in its assessment of the PCC’s effectiveness, accomplishments, and future role in setting standards for private companies.
When the trustees created the PCC in May 2012, they stated that they would conduct an assessment of the council following its first three years of operation.
The PCC has established a number of GAAP alternatives for private companies that are intended to decrease costs and complexity without sacrificing usefulness to users of financial statements. To date, PCC-initiated actions have resulted in four Accounting Standards Updates.
In addition, the PCC has given FASB feedback on private company perspectives during the board’s development of standards.
“The PCC has made significant progress in addressing issues that are important to private companies and the wider financial reporting community,” FAF Chairman Jeffrey Diermeier said in a news release. “Going forward, the PCC will need to balance the demands of its role as an advisory body to the FASB with its responsibility to identify and help resolve private company financial accounting and reporting issues that arise in current GAAP.”
FAF’s trustees identified possible improvements to the PCC in the request for comment, some of which the PCC and FASB already have started to implement. The potential improvements include:
- Having the PCC continue to establish working groups for select FASB projects.
- A consistent and continuous feedback mechanism among PCC members, FASB members, and staff on active FASB projects.
- A continued transition for the PCC into a body that primarily provides input on active FASB agenda projects.
- Participation by PCC members, as their schedules allow, in outreach performed by FASB with private company stakeholders.
- Continuing efforts by FAF’s Appointments and Evaluations Committee to seek individuals with the right credentials to advise FASB on active projects.
Written comments can be emailed to PCCReview@f-a-f.org by May 11.
— Ken Tysiac is a JofA editorial director.