Tailoring U.S. GAAP for private company financial reporting
The wheels are in motion to finalize a new structure to more specifically address the financial reporting needs of private companies. Many business leaders believe that U.S. generally accepted accounting principles (U.S. GAAP) are currently tailored more for public companies, but there’s no consensus on the best way to set new standards that will provide useful, relevant information that reflects the operational performance and financial position of private companies.
The Financial Accounting Foundation (FAF) could meet as early as May 2012 to discuss a final structure and plan for addressing private company financial reporting. The FAF has proposed creating the Private Company Standards Improvement Council (PCSIC or Council) that would recommend changes to U.S. GAAP for private companies. This proposal has spurred heated debates among private company stakeholders.
In this publication, we address:
- The case for different private company standards,
- The long road to the current proposal,
- FAF’s proposed Council, and
- Stakeholder perspectives on the Proposed Council