Private Company Accounting PrinciplesJune 13, 2012
The Financial Accounting Foundation (FAF) Board of Trustees has voted to establish a new group for setting accounting standards for private companies. The new group, the Private Company Council (PCC), will determine whether exceptions or modifications to existing U.S. Generally Accepted Accounting Principles (U.S. GAAP) are necessary to address the needs of private companies. This is sometimes colloquially referred to as establishing a “little GAAP” for private companies as opposed to “big GAAP” for public companies. The PCC will vote on any proposed changes which will be subject to endorsement by the FinancialAccounting Standards Board (FASB) and submitted for public comment before being incorporated into GAAP.
The PCC will have 9 to 12 members selected and appointed by the FAF Board of Trustees. The PCC Chair will not be a FASB member. Membership of the PCC will include a variety of users, preparers and practitioners with substantial experience working with private companies. Members will be appointed for a three-year term and may be reappointed for an additional term of two years. On June 1, FAF issued a request for nominations for candidates to serve on the Private Company Council (PCC). The deadline to submit nominees for PCC members and the PCC chair is June 30, 2012. More information and nomination forms can be found here.
The Financial Accounting Foundation Board of Trustees final report entitled “Establishment of the Private Company Council” can be read by clicking here.