Momentum growing for separate private company standard

The Private Company Financial Reporting Committee (PCFRC) has written to the Financial Accounting Foundation, FASB’s parent organization, requesting they consider a separate stand-alone standard for private companies.

“In our [PCFRC] unanimous opinion, there should be separate accounting standards that are tailored to the needs of private companies,” Thomas Groskopf, CPA, CVA, a partner with Barnes Dennig & Co. in Cincinnati, and a member of the PCFRC, told an audience at OSCPA’s Private Companies Conference.

“The Foundation asked for input,” Groskopf said. “We do need our own private company GAAP.”

Groskopf provided attendees in person and online with a FASB and PCFRC update, citing there is momentum now for issuing separate standards for non-public entities. “Private companies are vastly underrepresented in due process. A lot of the noise comes from public company investors and what makes sense for that audience.” Groskopf stressed that this isn’t always the same for private companies.

Among FASB’s ongoing projects, Groskopf noted that financial statement presentation may have the most significant impact on preparers. “We will see a massive redesign in financial statements,” Groskopf said. “This is probably the biggest thing preparers will have to make a decision on in the coming years.”

Edward Burghard with the Ohio Business Development Coalition also gave attendees an update on what Ohio is doing to spur growth and how those practices can be applied to private companies.

Consistently making a promise that is appealing to your customers – and then delivering on that promise – is key, Burghard said. Like many organizations, Ohio is now competing with other countries, not just other states, thanks to growing technology and globalization. Branding and image – beyond logos and business cards – is important for differentiate an organization from the competition.

Burghard cited a study that when companies make a short list of potential sites for business development, 71% haven’t talked to a development director, department or team. This underscores the importance of maintaining a positive image in front of potential customers, even when they aren’t looking.

Burghard also asked attendees to help tell Ohio’s story. “CPAs influence a wide range of businesses. Engage with executives and present your own story. You help them form an opinion of what it’s like to live and work in Ohio.”

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