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FAF, FASB Major Developments for Private Companies Coming this Spring

Major developments in the ongoing work of the Financial Accounting Standards Board and its parent body, the Financial Accounting Foundation, in their work toward improving accounting standard-setting for private companies, are expected to spring forward this spring, based on remarks of the FASB Chairman at two events earlier this month.

FAF Action on Private Co Standard-Setting Council Expected in May

In remarks on March 12, 2012 during her 2012 Chairman's Outlook on the Financial Accounting Standards Board, FASB Chairman Leslie F. Seidman spent a fair amount of time discussing private company initiatives of the FASB and its parent organization, the FAF, in addition to reporting on other major projects of the FASB, including convergence projects with the International Accounting Standards Board (IASB). The program was webcast live by FASB, the archived webcast is available.

One of the topics Seidman spoke about was the status of the FAF's proposal to improve private company standard-setting. The FAF released its proposal for public comment last fall, and has been considering input received via comment letters and a series of 4 public roundtables. The proposal is formally entitled the FAF's "Plan to Establish the Private Company Standards Improvement Council" (aka the FAF Plan.)  The FAF has received over 7,300 comment letters to date on its proposal, including  7,069 form letters (generally reflecing AICPA’s position/letter-writing-campaign) and 299 other letters. See the comment letter filed by FEI’s Committee on Private Company Standards.

In addition to soliciting feedback on the FAF Plan through the comment letter process, the FAF also gathered feedback during a series of four public roundtables, taking place in various locations in the U.S., during the past three months.

In his article Private Company Reporting Decision Could Come in May, FASB Chairman Says, published in the AICPA's Journal of Accountacy, Ken Tysiac reports that Seidman said during the March 12 Outlook on FASB webcast: "The FAF trustees hope to vote on a final structure and plan for private company financial reporting at their meeting in May."  

FASB Adds Project to Define Nonpublic Entities
As noted in an FEI news summary earlier this month, the FASB announced the addition of a new project to its agenda on March 7, to define 'nonpublic entities,"  

FASB's specific standard-setting deliberations relating to private company accounting standards are separate from the FAF's deliberations in its oversight capacity and overarching proposals relating thereto, with respect to the independent standard-setting undertaken by the FASB and the GASB.

FASB Expects To Release Discussion Paper on Private Co Conceptual Framework in "Couple of Months"
Additionally, FEI Committee on Private Company Standards member Alex Corl, and FEI Director of Accounting Policy and Financial Research Lorraine Malonza reported to us that FASB Chairman Leslie Seidman announced at the FAF's March 1 public roundtable that FASB anticipates releasing for public comment a Discussion Paper on its proposed Conceptual Framework for private company accounting standards, and that the release of the DP is expected  'within a couple of months."  This announcement and other highlights can be found in our earlier post, Highlights of FAF's Private Co Roundtable, 3/1 Boston MA.
Posted: 3/21/2012 9:48:19 AM by Edith Orenstein | with 0 comments
Filed under: Alex Corl,FEI blog,private companies,FAF,FASB,PCSIC,AICPA

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