FASB has released a staff paper that outlines an approach for deciding whether and when to modify U.S. GAAP for private companies. FASB will accept feedback on the framework proposed in the staff paper until Oct. 31
The decision-making framework is intended to help FASB and the newly-created Private Company Council identify the needs of private company financial statements users as well as ways to reduce the complexity and cost of preparing private company financial statements in accordance with U.S. GAAP.
The recommendations contained in the Invitation to Comment reflect what stakeholders told the FASB staff about their experiences with private company financial statements.
FASB is seeking feedback specifically on six significant factors:
- Types and number of financial statement users.
- Access to management.
- Investment strategies.
- Ownership and capital structures.
- Accounting resources.
- Learning about new financial reporting guidance
The Invitation to Comment also seeks stakeholder feedback on five areas where financial accounting and reporting guidance might differ for private and public companies:
- Recognition and measurement
- Display (presentation)
- Effective dates
- Transition methods