At the Financial Accounting Foundation's meeting earlier today, the FASB overseer voted to establish a Private Company Council (PCC) - a modified version of its earlier proposal to form a Private Co Standards Improvements Council, to serve the dual purpose of:
1. determining whether exceptions or modifications to existing nongovernmental U.S. Generally Accepted Accounting Principles (U.S. GAAP) are necessary to address the needs of users of private company financial statements, by identifying, deliberating, and voting on any proposed changes, which will be subject to endorsement by the FASB and submitted for public comment before being incorporated into GAAP, and
2. serving as the primary advisory body to the FASB on the appropriate treatment for private companies for items under active consideration on the FASB’s technical agenda.
FAF Chairman Jack Brennan expressed thanks for the valuable feedback received from over 7,000 consitituents on the FAF's earlier proposal, and FAF Executive VP and CEO Terri Polley noted that while users of public and private co financial statements sometimes have disparate needs, the resulting plan approved by the FAF trustees today will not create a 'two-GAAP' system.
FEI's Committee on Private Company Standards (CPC-S),
in its comment letter filed earlier this year, had been supportive of the FAF's plan to address private company standard-setting, with some suggested improvements to that plan.
Read the FAF's press release
issued today, which discusses matters relating to the new PCC such as: Agenda Setting, FASB Endorsement Process, Membership and Terms, FASB Liaison and Staff Support, Meetings, Oversight, and FAF Trustee's 3-year Assessment (including interim quarterly reports from the PCC to the FAF).
The FAF states that a complete report on the formation of the PCC will appear on the FAF website
next week, and a call for nominations to the new PCC will go out within the next few weeks. UPDATE:
See the FAF's Final Report of the Establishment of the Private Company Council,
published May 30, 2012.