AICPA/FAF/NASBA “Blue-Ribbon" Panel on Standard Setting for Private CompaniesNew—Blue-Ribbon Panel Addressing Standards for Private Companies Weighs GAAP with Exceptions and a Separate Standards Board (Posted 10/08/10) (Posted 09/10/10)
Objectives and Timeline
The American Institute of Certified Public Accountants (AICPA), the Financial Accounting Foundation (FAF; the parent organization of the Financial Accounting Standards Board (FASB)), and the National Association of State Boards of Accountancy (NASBA) have established a “blue ribbon" panel (the Panel) to address how accounting standards can best meet the needs of U.S. users of private company financial statements. The Panel will conclude its work and issue a report, with any recommendations on the future of standard setting for private companies, to the FAF Board of Trustees (the Trustees) in approximately one year. The Panel’s report will be made available to the public and the Trustees’ resulting action plan is expected to be exposed for public comment prior to that plan being finalized.
Panel Structure and Membership
The Panel is chaired by Rick Anderson, Chairman and CEO of Moss Adams, LLP, and FAF Trustee, and is comprised of 18 members. Panel Members are senior leaders who represent a cross-section of financial reporting constituencies, including lenders, investors, and owners, as well as preparers and auditors. All members have both extensive experience in their field and a keen and broad interest in financial reporting for private companies.
In addition to the Panel members, the Panel also has invited certain regulators and other key stakeholders to serve as Participating Observers.
Others will likely be invited to individual meetings to provide their expertise to the Panel on specific matters.
Staffing is provided by the AICPA and the FAF.
Scope of Review
The Panel will comprehensively review the current system of standard setting for private companies in the U.S., including the following matters:
- Who are the actual users of private company financial statements and how do they use GAAP financial statements in their decision making?
- What is the key, decision-useful information that the various users need from GAAP financial statements?
- Are current GAAP financial statements meeting those needs? Why or why not?
- Are the benefits of GAAP financial statements outweighing the costs of preparing those statements for private companies?
- How does standard setting for private companies in the U.S. compare to standard setting in other countries, both those that have adopted IFRS for Small and Medium-Size Entities and those that have not?
- To the extent that current GAAP is not meeting user needs in a cost-beneficial manner, what are some possible alternatives for private company standards (e.g., separate, stand-alone standards; base-level standards for all entities with additional disclosure requirements for public companies) and what are the implications for standard-setter structure and/or processes?
The Panel will have approximately 4-5 in-person, one-day meetings. The meetings will generally be held in either New York or Norwalk, CT, although one of the meetings may be held elsewhere.
Because of the high level of interest in the Panel’s work from various reporting constituencies, the Panel will generally meet in public sessions, with webcasting facilities available to all interested parties. The Panel meetings may also involve private sessions, at the discretion of the chairman, for administrative matters and report drafting.
Depending on the needs of the Panel, sub-panels may be formed to consider various issues in-between panel meetings.
If you would like more detailed information about Blue-Ribbon Panel, call or write:
Jeffrey D. Mechanick, Assistant Director
Financial Accounting Standards Board
401 Merritt 7
Norwalk, Connecticut 06856-5116