The trustees of the Financial Accounting Foundation are asking stakeholders to weigh in on the report card they are preparing on the performance of the Private Company Council over the past three years.
In a notice issued Thursday, the trustees, who created the PCC in May 2012, asked for comment on the council’s effectiveness, accomplishments, and future role in setting standards for private companies.
Specific questions include, “Has the PCC been successful in proposing alternatives within Generally Accepted Acccounting Principles that address the needs of private company financial statement users?” and “Has the PCC been effective as an advisory body to the FASB in the standard-setting process?” Stakeholders have until May 11 to respond.
“The PCC has made significant progress in addressing issues that are important to private companies and the wider financial reporting community,” FAF Chairman Jeffrey Diermeier said in a news release. “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.”
When the trustees established the PCC, they stated that they would conduct an assessment of the council after its first three years of operation.
During that time, the Journal of Accountancy noted, the PCC has established a number of GAAP alternatives for private companies that are intended to decrease costs and complexity without sacrificing usefulness to users of financial statements. To date, PCC-initiated actions have resulted in four Accounting Standards Updates.
In addition, the PCC has given FASB feedback on private company perspectives during the board’s development of standards. Last week, council members told the FASB that an initiative to simplify the balance sheet classification of debt was conceptually sound but expressed concern there could be unintended consequences as a result of more debt being classified as current.
The FAF trustees identified possible improvements to the PCC in the request for comment. They include continuing to transition the council “from a body that primarily develops alternatives to existing GAAP to one that primarily provides input on active FASB agenda projects.”