Private company committee considers application of IFRS

The Private Company Financial Reporting Committee (PCFRC) discussed the possibility of applying International Financial Reporting Standards (IFRS) to private companies in the U.S. The PCFRC is a joint committee of FASB and the AICPA.

The International Accounting Standards Board (IASB) will issue a document related to its private entities project in the first quarter of 2009. The document could be used as a guide for developing financial reporting standards for private companies or the AICPA could decide to remain with U.S. GAAP. PCFRC Chair Judy O’Dell said the committee did not come to any conclusions or recommendations during the discussion.

“We discussed whether private companies should go that way and use some modified form of IFRS, or maintain GAAP, which is the approach the Canadians are taking,” O’Dell said. “The main goal is to get the dialogue started and see which way people might go.”

The PCFRC also sent a letter to FASB requesting an exemption from FASB Interpretation No. 48 (FIN 48), Accounting for Uncertainty in Income Taxes, for private companies. The committee has a growing concern as the time is drawing near when private companies would need to adopt FIN 48.

To date, FASB has not announced a decision on the recommendation.

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