Summary of Board Decisions

Summary of Board decisions are provided for the information and convenience of constituents who want to follow the Board’s deliberations. All of the conclusions reported are tentative and may be changed at future Board meetings. Decisions are included in an Exposure Draft for formal comment only after a formal written ballot. Decisions in an Exposure Draft may be (and often are) changed in redeliberations based on information provided to the Board in comment letters, at public roundtable discussions, and through other communication channels. Decisions become final only after a formal written ballot to issue an Accounting Standards Update.

July 16, 2013 Private Company Council Meeting

Private Company Decision-Making Framework. The Board and the Private Company Council (PCC) redeliberated the Private Company Decision-Making Framework: A Guide for Evaluating Financial Accounting and Reporting for Private Companies (guide). The Board and the PCC voted to finalize the guide based on decisions reached at this meeting, which are outlined below.

Differential Factors

The Board and PCC decided that the six differential factors in the guide are appropriate and directed the staff to make some nonsubstantive clarifications that would increase consistency between the differential factors section in the beginning of the guide and the basis for conclusions.


The Board and the PCC decided that the requirement of quantitative information about the adoption of an alternative transition method by a private company should only be considered in limited circumstances where the nature of the amendment to existing guidance affects information that users of private company financial statements find relevant.

Industry-Specific Guidance

The Board and the PCC decided to remove special consideration of industry-specific guidance within the display module to eliminate redundancy, because the guide already includes a presumption that financial statement display guidance is relevant to users.

In addition, the Board and the PCC decided to add a consideration for cost and complexity in addition to user relevance within the industry-specific guidance section of the disclosure module and the recognition and measurement module. Thus, the consideration of industry-specific guidance would be similar to the consideration of non-industry-specific guidance. However, the guide would acknowledge that there is a greater likelihood that industry-specific guidance is relevant to users of private company financial statements.

Access to Management

The Board and the PCC reaffirmed their consideration of access to management in the disclosure module but decided to remove access to management as a consideration in determining whether a recognition and measurement alternative for private companies should be permitted.

Recognition and Measurement Questions

Question 1.5h (access to management) will be removed from the guide due to the Board’s and PCC’s decision related to access to management.

The Board and PCC decided to improve the wording of question 1.5e (probable threshold) to clarify the meaning of the question.

They also decided to remove question 1.5i; however, the guide will acknowledge that the lag between the year-end reporting date and the date financial statements are issued and made available to users is a difference between private and public companies due to statutory filing requirements for public companies.

All or Nothing

The Board and the PCC reaffirmed their decision to generally permit a private company to select the alternatives within recognition or measurement guidance that it deems appropriate to apply; however, the Board and the PCC may require certain related alternatives be elected as a group.


The Board and the PCC decided not to address the assessment of preferability for private companies in the guide.

Determining the Effective Date

The Board and the PCC reaffirmed their decision that private companies generally should not be required to adopt amendments during an interim period within the fiscal year of adoption.

Agenda Decision: Development Stage Entities. The FASB added a narrow scope project to its agenda to address the concerns of both nonpublic and public companies regarding development stage entities. The scope of the project is to eliminate the requirements for inception-to-date information for development stage entities. However, the Board will conduct additional outreach with users of public and private company financial statements to determine whether to require new disclosures for development stage entities.