July 11, 2017
The Private Company Council (PCC) met on Tuesday, July 11, 2017. At the meeting, PCC and FASB members shared stakeholder input from the private company Town Hall meeting on June 13, 2017 as part of the AICPA National Advanced Accounting and Auditing Technical Symposium (NAAATS).
The FASB staff delivered updates (and the PCC provided input) on the following FASB projects:
- Consolidation Targeted Improvements to Related Party Guidance for Variable Interest Entities. PCC members discussed feedback from NAAATS, expressed support, and commended the Board for the private company alternative, which, as proposed, would provide a scope exception from the application of the VIE guidance to companies under common control when certain requirements are met.
- Liabilities and Equity—Targeted Improvements. PCC members supported the FASB’s standard that simplifies the accounting of financial instruments with “down rounds.”
- Cloud Computing (EITF Issue No. 17-A). The PCC confirmed that accounting for implementation costs in a cloud computing arrangement is a prevalent issue among private companies. A PCC member also recommended that the FASB provide application guidance to discern types of implementation costs that may be appropriate for capitalization.
- Nonemployee Share-Based Payment Accounting Improvements. The PCC discussed feedback and expressed support for the private company alternatives within the proposal.
- Invitation to Comment (ITC) on Agenda Consultation. Many PCC members expressed support for the FASB’s continuing implementation and education efforts for recently issued standards. The PCC also recommended that the FASB should remain cognizant of the pace of change when considering possible new projects.
- Balance Sheet Classification of Debt. A majority of PCC members recommended that the FASB finalize the proposed guidance with minor improvements on balance sheet presentation. PCC members also expressed interest in helping the Board determine appropriate transition provisions and educational efforts.
PCC Meeting Recaps are provided for those interested in following the activities of the PCC. Official positions of the PCC and the FASB are reached only after extensive due process & deliberations. More details on the PCC’s input on the FASB’s projects can be found within the meeting minutes, which will be published on the PCC website in the coming weeks.