Will there be separate standards for private companies?

The AICPA, along with the Financial Accounting Foundation (FAF), established a “blue-ribbon panel” to consider the question – would private companies be better served by a separate set of accounting standards?

The panel will provide recommendations on the future of standard setting for private companies, including whether separate, stand-alone accounting standards for private companies are needed.

Panel members will represent a cross-section of financial reporting constituencies, including lenders, investors and owners as well as preparers, auditors, and regulators. Joining the FAF and AICPA as sponsors of the panel is the National Association of State Boards of Accountancy (NASBA).

The Private Company Financial Reporting Committee (PCFRC), a joint committee of the AICPA and FASB, believe the time is right to develop a separate 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 in November. “The Foundation asked for input. We need our own private company GAAP.”

The chairman and members of the panel will be named in January.

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