Project Update

Private Company Decision-Making Framework

Last updated on January 16, 2014

(Updated sections are indicated with an asterisk *)

*Project Objective
*Due Process
*Decisions Reached at Last Meeting
*Summary of Decisions Reached to Date
*Board/Other Public Meeting Dates
Background Information
*Contact Information

*Project Objective

The objective of this project is to develop a private company decision-making framework (the guide) for the Board and the PCC to use in determining whether and in what circumstances to provide alternative recognition, measurement, disclosure, display, effective date, or transition guidance for private companies reporting under U.S. GAAP.

This Guide provides considerations for the PCC and the Board in making user-relevance and cost-benefit evaluations for private companies under the existing conceptual framework. The Guide is intended to be a tool to help the Board and the PCC identify differential information needs of users of public company financial statements and users of private company financial statements and to identify opportunities to reduce the complexity and costs of preparing financial statements in accordance with U.S. GAAP.

*Due Process Documents

On December 23, 2013, the Board and the Private Company Council issued the Final Guide, Private Company Decision-Making Framework: A Guide for Evaluating Financial Accounting and Reporting for Private Companies. On April 15, 2013, the Board and the Private Company Council issued an Invitation to Comment, Private Company Decision-Making Framework: A Guide for Evaluating Financial Accounting and Reporting for Private Companies, with a comment period that will end on June 21, 2013.
On July 31, 2012, after consultation with the Board, the FASB staff issued a Discussion Paper, Private Company Decision-Making Framework: A Framework for Evaluating Financial Accounting and Reporting Guidance for Private Companies, the comment period ended on November 9, 2012.

*Decisions Reached at Last Meeting

See meeting minutes.

*Summary of Decisions Reached to Date

See the Final Guide.

*Board/Other Public Meeting Dates

July 16, 2013 PCC Meeting—The Board and the PCC finalized the Private Company Decision-Making Framework
April 10, 2013 Board Meeting—The Board decided that the comment period for the Private Company Decision-Making Framework should end on June 21, 2013.
February 12, 2013 PCC Meeting—The Board and the PCC made decisions related to the Private Company Decision-Making Framework.
July 20, 2012 Education Session—The staff discussed with the Board their remaining questions before the release of the Invitation to Comment on the decision-making framework for private companies. No decisions are made at education sessions.
May 14, 2012 Education Session—Discussion about the staff’s progress toward developing a decision-making framework for private companies. Refer to linked presentation used to facilitate the update provided by the staff. No decisions are made at education sessions.

Background Information

Creation of a decision-making framework about standard-setting for private companies was one of the important recommendations included in a report by the Blue-Ribbon Panel on Standard Setting for Private Companies released in January 2011 to the Board of Trustees of the Financial Accounting Foundation (FAF), which is the FASB’s oversight organization. The Blue-Ribbon Panel’s report also included a short-term recommendation that the FASB begin work on the framework while the FAF Trustees consider the other recommendations in its report.

Completion of the proposed private company decision-making framework underscores the FASB and the PCC’s ongoing commitment to better serve the needs of all private company stakeholders, including users and preparers of private company financial statements.

*Contact Information

Michael Cheng
Project Manager
mkcheng@fasb.org

Jeffrey D. Mechanick
Assistant Director
jdmechanick@fasb.org