Panel Reaffirms Support for Private Company Standards Board

A blue-ribbon panel composed of representatives from the National Association of State Boards of Accountancy (NASBA), the Financial Accounting Foundation (FAF) and the AICPA have, after meeting for the fifth time on Dec. 10, reaffirmed its initial recommendation that there should be a separate standards setting board responsible for private company accounting issues.

Having done this, the panel is currently working on drafting a report that will explain specifically how this proposed private company standards board would work, including how it might coordinate with the already existing Financial Accounting Standards Board (FASB), what the board’s mission would be, how it would be structured and how it could be funded.

This report is expected to be completed and submitted to the FAF’s Board of Trustees early next year. The board will then deliberate and compose an action plan which will subsequently be released to the public.

The panel’s statement did not say whether there was a similar reaffirmation of the other major component of the panel’s initial set of recommendations, the creation of a modified Generally Accepted Accounting Principles (GAAP) for use by private companies. The statement only said that the panel “continued discussion” on this recommendation.

The panel was initially convened in 2009 in order to address what its members saw as systemic problems in the current standards setting process as it related to private companies. In an article covering this topic, printed in the Nov. 15 issue of the Trusted Professional, NYSSCPA member Daniel J. Noll, who serves as director of accounting standards with the AICPA, said that the panel felt there are too many GAAP standards that aren’t relevant to private companies, such as disclosure of goodwill impairments.