A majority of the blue-ribbon panel addressing how US accounting standards can best meet the needs of users of private company financial statements believe there is a need for a new standard-setting model that follows Generally Accepted Accounting Practices (GAAP) with exceptions for private companies. In addition, the majority envisions a separate private company standards board under the oversight of the Financial Accounting Foundation (FAF). The proposal emerged at the panel’s fourth public meeting.
The panel will continue to develop this model, as well as address issues that surfaced outside of the consensus views that were discussed today. The panel will discuss a draft report containing its recommendations at its next meeting on 10 December. The panel is expected to issue the report to the FAF board of trustees in January 2011 and then to the public. After deliberation, the FAF trustees’ resulting action plan is expected to be subject to further input from constituents, including exposing the plan for public comment prior to its being implemented.
The American Institute of Certified Public Accountants (AICPA), the FAF and the National Association of State Boards of Accountancy (NASBA) formed the panel in 2009. The members of the panel comprise a cross-section of financial reporting constituencies, including lenders, investors, and owners as well as preparers, auditors, and regulators. Rick Anderson, chairman of Moss Adams, chairs the panel. In August, the panel asked for written public input on some key private company reporting questions that surfaced from its meetings.
“On behalf of the AICPA members working in the private company arena, I’m pleased the majority of the panel members supported the bold step of a new, separate private accounting standards board under the FAF’s oversight,” said Barry Melancon, AICPA president and chief executive officer (CEO). “An important benefit of having a new board is to help ensure the needs of the private company sector are appropriately addressed in the standard-setting process.”
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