News Release 02/26/15
FAF SEEKS STAKEHOLDER COMMENTS ON
PRIVATE COMPANY COUNCIL THREE-YEAR ASSESSMENT
Norwalk, CT—February 26, 2015—The Board of Trustees of the Financial Accounting Foundation (FAF) today issued a Request for Comment seeking stakeholder input as part of an assessment of the Private Company Council’s (PCC) effectiveness, accomplishments, and future role in setting standards for private companies.
The assessment is intended to assist the Trustees in determining whether the PCC is fulfilling its mission and meeting its primary objectives, and whether the Trustees should make any changes in the PCC’s structure that would improve the PCC’s effectiveness. In the May 2012 report that established the PCC, the Trustees stated that they would conduct an overall assessment of the PCC following its first three years of operation.
“The PCC has made significant progress in addressing issues that are important to private companies and the wider financial reporting community,” said FAF Chairman Jeffrey J. Diermeier.
“Going forward, the PCC will need to balance the demands of its role as an advisory body to the FASB with its responsibility to identify and help resolve private company financial accounting and reporting issues that arise in current GAAP. We are seeking stakeholder input to help determine whether the identified improvements will help the PCC achieve this balance,” added Mr. Diermeier.
In the Request for Comment, the Trustees identify possible improvements to the PCC based on initial informal feedback—some of which the PCC and the FASB have started to implement. Among the possible improvements on which the Trustees are seeking comment are:
- The PCC should continue to establish working groups for select FASB projects.
- There should be a consistent and continuous feedback mechanism among the PCC members and FASB members and staff on active FASB projects.
- The PCC should continue transitioning to a body that primarily provides input on active FASB agenda projects.
- PCC members should participate as their schedules allow in outreach performed by the FASB with private company stakeholders.
- The FAF Appointments and Evaluations Committee should continue to seek individuals that have the requisite profile to advise the FASB on active projects.
- Has the PCC been successful in proposing alternatives within GAAP that address the needs of private company financial statement users?
- Has the PCC been effective as an advisory body to the FASB?
- What organizational or procedural improvements to the PCC are needed?
- Are further changes to the standard-setting process for private companies warranted?
About the Financial Accounting Foundation
Established in 1972, the Financial Accounting Foundation (FAF) is the independent, private-sector, not-for-profit organization based in Norwalk, Connecticut responsible for the oversight, administration, financing, and appointment of the Financial Accounting Standards Board (FASB) and the Governmental Accounting Standards Board (GASB). The FASB and GASB establish and improve financial accounting and reporting standards – known as Generally Accepted Accounting Principles, or GAAP – for public and private companies, not-for-profit organizations, and state and local governments in the United States. For more information, visit www.accountingfoundation.org.
About the Private Company Council (PCC)
The PCC determines alternatives to existing nongovernmental GAAP to address the needs of users of private company financial statements, based on criteria mutually agreed upon by the PCC and the FASB. Before being incorporated into GAAP, PCC recommendations will be subject to a FASB endorsement process. The PCC also serves as the primary advisory body to the FASB on the appropriate treatment for private companies for items under active consideration on the FASB’s technical agenda. For more information, visit www.fasb.org/pcc.