NEWS RELEASE 05/07/13
PRIVATE COMPANY COUNCIL VOTES TO EXPOSE PROPOSED ALTERNATIVES WITHIN U.S. GAAP FOR PRIVATE COMPANIES
Norwalk, CT, May 7, 2013—The Private Company Council (PCC) today voted to move forward with proposed alternatives within U.S. Generally Accepted Accounting Principles (GAAP) designed to improve financial reporting for private companies. The PCC’s approved exposure of the proposals is the first step in a process toward endorsement by the Financial Accounting Standards Board (FASB).
In its third public meeting, the PCC made tentative decisions in the following areas, including:
- Relief from separately recognizing certain intangible assets acquired in a business combination
- Allowing for the amortization of goodwill and a simplified goodwill impairment model
- Allowing two simpler approaches to accounting for certain types of interest rate swaps when a private company intends to economically convert the interest rate on its debt.
About the PCC
The PCC was established by the Financial Accounting Foundation (FAF) Board of Trustees to work with the FASB to determine whether and when to modify U.S. GAAP for private companies. For more information on the PCC, please visit the FAF website or read the Establishment of the Private Company Council Final Report.
About the Financial Accounting Foundation
The FAF is responsible for the oversight, administration, and finances of both the Financial Accounting Standards Board and its counterpart for state and local governments, the Governmental Accounting Standards Board. The FAF also is responsible for selecting the members of both Boards and their respective Advisory Councils.
About the Financial Accounting Standards Board
Since 1973, the Financial Accounting Standards Board has been the designated organization in the private sector for establishing standards of financial accounting and reporting. Those standards govern the preparation of financial reports and are officially recognized as authoritative by the Securities and Exchange Commission and the American Institute of Certified Public Accountants. Such standards are essential to the efficient functioning of the economy because investors, creditors, auditors, and others rely on credible, transparent, and comparable financial information. For more information about the FASB, visit our website at www.fasb.org.