This afternoon, the Financial Accounting Foundation, which oversees the FASB, announced the appointment of Billy Atkinson, former Chairman of NASBA, to chair the FAF's new Private Co Council (PCC).
The PCC will advise the FASB on whether and when to modify or make exceptions to U.S. GAAP for private (vs. public) companies. As previously announced, the FAF voted in May to form the PCC,
after extensive deliberations over an earlier proposal, including a review of thousands of public comment letters on that proposal, and feedback from a series of public roundtables.
FEI member George Beckwith, Vice President and Chief Financial Officer of National Gypsum Company, and Chairman of FEI's Committee on Private Company Standards, is among the other nine members appointed to the PCC, along with Atkinson. FEI's Committee on Private Company Standards
FASB Board Member Daryl Buck
, who has an extensive background in private company reporting, will serve as the FASB board's liaison to the PCC.
Read more in today's FAF press release
and in the FAF's report on the Establishment of the PCC, published in May.
On a call with members of the press today, FAF Chairman Terry Polley said this was an "exciting, important day" and that the FAF is "very pleased with the slate" announced today. She noted the members of the PCC are committeed to independent standard setting, are familiar with private company standard setting, and seek to provide clarity in private company accounting.
Atkinson added, "I am very pleased to be part of the FAF's commitment to improve the standard-setting process for private companies." He said he believed the FAF trustees selected an "exceptional group", and the goal was to create more consistent, transparent accounting principles for private co's - and, with relevance for private companies. Atkinson noted he also looked forward to working with FASB board liaison Daryl Buck.
According to Atkinson, as the PCC gears up and works with FASB and other interested parties:
The keys would be mutual respect, and ability to obtain meaningful feedback from all entities that are stakeholders in this process.
FASB Board Chairman Leslie Seidman stated, "I want to assure you FASB is very committeed to the support of the PCC," noting FASB would commit resources to the PCC, including staff resources.
Seidman added the FASB plans to have a comment letter analysis ready in time for the first meeting of the PCC in the fourth quarter. Additionally, she said FASB is very excited and is preparing information for the first meeting of the PCC.
Low Hanging Fruit
Asked by Dena Aubin of Reuters what the first item addressed by the PCC may be, Atkinson responded there are a number of items deemed "low hanging fruit," including FIN 48, Uncertain Income Taxes, a standard which has been of significant concern to private companies - and received a mixed review following the FAF's 'post-implementation review.' Other issues that may be up for consideration include complexity of derivatives, accounting for warrants as liabilities, and some elements of business combinations.
In response to a question from Joe Radigan of Thomnson Reuters, as to who the user representatives are, Terry Polley responded they are Stephen Brown, Neville Grusd, and Carleton Olmanson. She added that the 10-member PCC included 3 members representing the user community, 3 representing preparers, and the remainder from the audit community.
AccountingToday's Michael Cohn asked Atkinson how the letter writing campaign that objected to an earlier proposal of the FAF. Atkinson responded, "We all agreed there is a problem to be solved... I expect we'll be able to whittle at these issues successfully, and I expect the AICPA and their members and resources will help support" the PCC.