Well, have you read about the progress in the area of Private Company Financial Reporting?
The Financial Accounting Foundation (FAF) issued their report, Establishment of the Private Company Council (PCC), on May 30, 2012. The report details the responsibilities of this new private company council. It will determine if there should be exceptions or modifications to GAAP for private companies (subject to “endorsement” by the FASB) and serve as an advisory body to the FASB for any new standards being considered.
This notion of “subject to endorsement” isn’t exactly what was recommended by the Blue Ribbon Panel on Private Company Reporting (of which FAF was a sponsoring organization). Seems like the FAF didn’t much care for the answer. So, they changed it a little. Or maybe they changed it a lot. The recommendation (supported by just about everyone I talked to) was to create an INDEPENDENT body that would make decisions about private company standards.
The FASB hasn’t really appeared to embrace the concept of differential standards in the past. So, will this new PCC truly make a difference? If any recommendation is subject to “endorsement” by the FASB, I am a bit skeptical.
More recently we have the announcement of the chair and members of the new PCC. I don’t know any of them personally. I have attended meetings with some of them. I have heard some of them speak. The chair is Billy Atkinson. Retired partner at PwC. When he was active at the firm he was an audit partner and a risk management partner in the firm’s private company services unit. Mr. Atkinson has an admirable record of service on the Texas Board of Accountancy, National Association of State Boards of Accountancy (including chairman), AICPA Governing Council, and many leadership positions with the Texas Society of CPAs.
In the past I have heard Mr. Atkinson speak on the subject of differential standards for private companies. It is safe to say that my interpretation of Mr. Atkinson’s remarks has been such that I would not characterize him as one who “embraces” the concept. I am not so sure that I could even say that he was skeptical. I guess I would say that he just really doesn’t much think that it is a very good idea.
So, given the decisions of the FAF since May 2012, I have to say that I can’t be very encouraging about making much progress for CPAs who really believe that there is a need for meaningful change for private company reporting standards.
Maybe you have a different view …