Since the Private Company Council was created three years ago, the FASB
has forged a strong relationship with the council and its members.
In the course of our work together, FASB members have sought to better account for the perspectives of private company stakeholders, while ensuring that Generally Accepted Accounting Principles continue to represent a single, unified set of accounting standards.
With the release earlier this week of the three-year review of the PCC conducted by the Financial Accounting Foundation—and the recent appointment of a new PCC chair, who will take over leadership of the council in January—a new phase in our relationship is about to begin.
The Board very much looks forward to working with new PCC Chair Candace Wright and the three new PCC members—Timothy Curt of Warburg Pincus, David Lomax of Liberty Mutual Insurance, and Harold Monk Jr. of Carr, Riggs & Ingram.
Candy Wright is an accomplished practitioner whose deep experience serving private company clients as a director of Postlethwaite & Netterville in Louisiana will bring a wealth of knowledge to the PCC. We believe she is the right leader to build on the significant accomplishments of outgoing PCC Chair Billy Atkinson, who led the council through its first three years of success.
Against that backdrop, I’d like to use this column to explore a few of the improvements to the PCC’s operating procedures outlined in the new FAF report and discuss how I believe that they will benefit private company stakeholders and the FASB standard-setting process.
I’ll also identify ways stakeholders can continue to provide valuable insights to the FASB and PCC, and work to better educate their investors, business partners, employees, and others on private company accounting issues.
In the year ahead, the FASB will focus on working with the PCC in two main areas:
I think this is especially important to the FASB as we look to the PCC for input on our active agenda projects. Providing private company perspectives during our process is important to us because it helps us proactively address their concerns before a standard is issued.
In this regard, we will look to expand communications on:
Since beginning our work together, members of the FASB and the PCC have hosted several public Town Hall Meetings across the country and have given presentations at numerous conferences and state society events. These opportunities enable stakeholders to discuss private company accounting issues and share their views and input on current and future agenda topics.
Stakeholders often provide us with perspectives we hadn’t considered.
It’s clear from these meetings that our private company stakeholders are engaged and eager to speak with the FASB and the PCC about issues that may affect them.
In addition to continuing with our town halls and speaking engagements, we will seek other opportunities to meet and speak with private company stakeholders.
In fact, you can take this time now to let us know if you would like to meet with the FASB and the PCC to discuss private company issues that may concern you.
Our ability to set good standards relies on input from a wide variety of stakeholders. We only get that input when people know what we’re doing, why we’re doing it, and tell us what we need to know. And we need more private company stakeholders involved in our process.
Finally, we’ve been told that most private companies view accounting education as a “once a year” exercise. But we think it is critically important in this new environment, where change comes at all of us at a fast pace, to rethink the notion that organizations should provide education for both clients and employees only on an annual basis.
We ask you to help us by:
In the course of our work together, FASB members have sought to better account for the perspectives of private company stakeholders, while ensuring that Generally Accepted Accounting Principles continue to represent a single, unified set of accounting standards.
With the release earlier this week of the three-year review of the PCC conducted by the Financial Accounting Foundation—and the recent appointment of a new PCC chair, who will take over leadership of the council in January—a new phase in our relationship is about to begin.
The Board very much looks forward to working with new PCC Chair Candace Wright and the three new PCC members—Timothy Curt of Warburg Pincus, David Lomax of Liberty Mutual Insurance, and Harold Monk Jr. of Carr, Riggs & Ingram.
Candy Wright is an accomplished practitioner whose deep experience serving private company clients as a director of Postlethwaite & Netterville in Louisiana will bring a wealth of knowledge to the PCC. We believe she is the right leader to build on the significant accomplishments of outgoing PCC Chair Billy Atkinson, who led the council through its first three years of success.
Against that backdrop, I’d like to use this column to explore a few of the improvements to the PCC’s operating procedures outlined in the new FAF report and discuss how I believe that they will benefit private company stakeholders and the FASB standard-setting process.
I’ll also identify ways stakeholders can continue to provide valuable insights to the FASB and PCC, and work to better educate their investors, business partners, employees, and others on private company accounting issues.
In the year ahead, the FASB will focus on working with the PCC in two main areas:
- Improving the PCC’s communication with the Board on current FASB projects, and
- Increasing the PCC’s engagement with private company stakeholders.
Providing private company perspectives during our process is important to us because it helps us proactively address their concerns before a standard is issued.
I think this is especially important to the FASB as we look to the PCC for input on our active agenda projects. Providing private company perspectives during our process is important to us because it helps us proactively address their concerns before a standard is issued.
In this regard, we will look to expand communications on:
- PCC “look-back” projects
- The FASB’s consideration of private company alternatives recommended by the PCC, and PCC input on projects on the FASB’s active agenda.
- Creating an agenda consultation group to discuss whether it is more efficient and effective for the PCC or the FASB to take the lead on a potential project
- Establishing working groups so that PCC members can communicate with FASB staff on private company considerations, and assist with outreach and the development of accounting alternatives
- Providing formal feedback or a consensus recommendation for the appropriate treatment for private companies on FASB projects, which the FASB would then document and consider in its deliberations and in the basis for conclusions for proposed and final standards.
In standard setting, as in life, communication is a two way street—and we rely on you to identify issues and help us make informed decisions.
Since beginning our work together, members of the FASB and the PCC have hosted several public Town Hall Meetings across the country and have given presentations at numerous conferences and state society events. These opportunities enable stakeholders to discuss private company accounting issues and share their views and input on current and future agenda topics.
Stakeholders often provide us with perspectives we hadn’t considered.
It’s clear from these meetings that our private company stakeholders are engaged and eager to speak with the FASB and the PCC about issues that may affect them.
In addition to continuing with our town halls and speaking engagements, we will seek other opportunities to meet and speak with private company stakeholders.
In fact, you can take this time now to let us know if you would like to meet with the FASB and the PCC to discuss private company issues that may concern you.
Our ability to set good standards relies on input from a wide variety of stakeholders. We only get that input when people know what we’re doing, why we’re doing it, and tell us what we need to know. And we need more private company stakeholders involved in our process.
We think it is critically important in this new environment, to rethink the notion that organizations should provide education for both clients and employees only on an annual basis.
Finally, we’ve been told that most private companies view accounting education as a “once a year” exercise. But we think it is critically important in this new environment, where change comes at all of us at a fast pace, to rethink the notion that organizations should provide education for both clients and employees only on an annual basis.
We ask you to help us by:
- Sharing project information with your colleagues and clients who are affected
- Encouraging your clients/colleagues to share input on those projects, and
- Encouraging greater participation in our due process at your firm and among your clients.