Financial Accounting Foundation
Board of Trustees

Private Company Review Committee

Committee Charter

Purpose

The Board of Trustees (Board) of the Financial Accounting Foundation (FAF) has established the Private Company Review Committee (Committee) as a special-purpose, non-standing committee of the Board to: (1) proactively oversee the activities between the Private Company Council (PCC) and the Financial Accounting Standards Board (FASB), and (2) ensure that the FASB engages in adequate consideration of private company financial reporting issues throughout the cycle of its standard-setting process.

Membership, Structure, and Duration

The Committee shall be a special purpose, non-standing Committee of the Board and all Committee members shall be Trustees. The Committee shall consist of three or more members. The Chair and the other members of the Committee shall be elected by the Board and shall serve until their successors shall be duly elected and qualified or until their earlier resignation or removal. The Chair shall possess substantial experience and exposure to private company financial reporting. The Committee may have a Vice Chair who shall be appointed by the Committee members.

The Chair of the Committee, in consultation with the Chairman of the Board, will determine the frequency of Committee meetings. The agenda for Committee meetings shall be established by the Committee Chair, with input from the Chair of the PCC and the FASB Member liaison to the PCC. The Committee may invite such members of management or staff to its meetings as it deems appropriate.

Committee members are expected to attend meetings of the Committee and meetings of the PCC, as observers, and to engage actively in the reporting process to the Board on the activities, findings and recommendations of the Committee.

The Committee has been established for an initial term of three years commencing January 1, 2013. After three years, as part of the Board’s comprehensive review of the PCC, the Board and the Committee will assess the PCC oversight responsibilities of the Committee and determine whether to continue such oversight by the Committee or to transition such responsibilities to a standing committee of the Board.

Principal Responsibilities

The Committee is charged with the following responsibilities:
  • Monitoring and holding the PCC and the FASB accountable for achieving the objective of ensuring adequate consideration of private company issues through the cycle of FASB’s standard-setting process. In conducting its monitoring, the Committee shall consider and evaluate the adequacy, comprehensiveness, effectiveness and adherence to due process procedures through all stages of the standards-setting process including, without limitation, the following:
    • The agenda-setting process;
    • The deliberations process;
    • The finalization process; and
    • The implementation process.
  • Observing (and reviewing reports of) meetings of the PCC, and as appropriate, observing (and reviewing reports of) meetings of the FASB at which PCC matters are deliberated and/or acted upon. 
  • Meeting periodically with the Chair of the PCC and the Chair of the FASB on the operation, effectiveness and efficiency of the interactions between the PCC and FASB.
  • Monitoring the leadership and management of the PCC by its Chair, the participation of PCC members in PCC meetings, and the engagement of dialog between the PCC and FASB. 
  • Procuring and reviewing periodic written reports of the PCC on its activities and interactions with the FASB.
  • Monitoring, in consultation with the PCC Chair and the FASB Chair, the adequacy of staffing of the PCC to fulfill its mission.
  • Providing quarterly (and, when appropriate, interim) reporting to the Board on the activities, observations and recommendations of the Committee.
  • Evaluating the adequacy of the Committee’s resources to fulfill its responsibilities.
  • Performing periodic self-assessments of the Committee’s roles, functions and performance.
Amendments
 
This charter may be amended only by the affirmative vote of the Board of Trustees.