Posts Tagged ‘FAF Financial Accounting Foundation

06
Oct
11

FAF says “no” to separate private company standard setting board

I’ve written previously  about the debate over private company reporting and the AICPA’s lobbying of the Financial Accounting Foundation to adopt the Blue Ribbon Panel’s recommendation for a separate standard setting board for private company GAAP.

On October 4, 2011 the FAF came back with an answer: “No”. The FAF instead opted for a separate “Private Company Standards Improvement Council” which would recommend changes to current GAAP for private companies to the FASB. The FASB would than make any changes to GAAP. This model is similar to the EITF model to handle emerging technical issues. Rather than restate or summarize this statement I thought it might be helpful to provide:

A link to the FAF executive summary of their recommendation  

And
A link to the AICPA’s response.

This story is not necessarily over. The FAF recommendation is open to public comment and as a result it is likely that there will be continued pressure on the FAF to revise their decision. However, the AICPA and private companies have made their voice heard already. I wonder if FAF would actually change its mind, since they resisted the first wave of public outcry for a separate board.

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