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The Private Company Council

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The Private Company Council
The Private Company Council

This paper will discuss the recently formed Private Company Council, its role in the accounting profession, pros and cons associated with it, and my personal opinion on the council.
Background
In the spring of 2012, the Financial Accounting Foundation (FAF) voted to establish a new council, the Private Company Council (PCC), which will serve two purposes: to identify and vote on proposed modifications and exceptions to U.S. GAAP for private companies as well as advise the Financial Accounting Standards Board (FASB) on private company considerations for the FASB’s projects. The overarching intent of the PCC is improve the process of setting accounting standards for private companies by modifying Generally Accepted Accounting Principles (GAAP) to better accommodate private companies and the users of their financial statements. To ensure that the PCC has the necessary tools to perform its function, the FASB is developing a Private Company Decision-Making Framework which will be a set of criteria for decisions about “whether and when to adjust requirements for recognition, measurement, presentation, disclosure, effective dates, and transition methods for standards that apply to private companies.” (Tysiac) After the PCC identifies regulations in U.S. GAAP that they wish to modify, they will forward proposed changes to the FASB. If a proposed change is endorsed by a simple majority of FASB members, the proposed change will then be made available for public comment. The PCC will consider the public’s comments, deliberate the proposed modification(s), and send a final report to the FASB. After reviewing the report, the FASB will hold the final determination if the proposed modification(s) will be added to U.S. GAAP.
Pros
The FASB has always worked toward improving accounting standards and the formation of the PCC falls in line with the end goal of making the standards relevant for both the organizations and


References: Financial Accounting Foundation. Financial Accounting Foundation Establishes New Council to Improve Standard Setting for Private Companies. Www.accountingfoundation.org. Financial Accounting Foundation, 23 May 2012. Web. 6 Apr. 2013. Melancon, Barry. "Why the AICPA Supports FAF 's Creation of Private Company Council - AICPA Insights." AICPA Insights. N.p., 13 June 2012. Web. 6 Apr. 2013. "Private Company Council IDs Three Projects for Agenda." The Ohio Society of CPAs. N.p., 13 Feb. 2013. Web. 6 Apr. 2013. Tysiac, Ken. "FAF Creates Private Company Council." FAF Creates Private Company Council. Journal of Accountancy, July 2012. Web. 6 Apr. 2013.
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