AICPA/FAF/NASBA “Blue-Ribbon Panel” on Standard Setting for Private
Companies
Objectives and TimelineThe American
Institute of Certified Public Accountants (AICPA), the Financial Accounting
Foundation (FAF; the parent organization of the Financial Accounting Standards
Board (FASB)), and the National Association of State Boards of Accountancy
(NASBA) have established a “blue ribbon panel” (the Panel) to address how
accounting standards can best meet the needs of U.S. users of private company
financial statements. The Panel will conclude its work and issue a report, with
any recommendations on the future of standard setting for private companies, to
the FAF Board of Trustees (the Trustees) in approximately one year. The Panel’s
report will be made available to the public and the Trustees’ resulting action
plan is expected to be exposed for public comment prior to that plan being
finalized.
Panel Structure and MembershipThe
Panel is chaired by Rick Anderson, Chairman and CEO of Moss Adams, LLP, and FAF
Trustee, and is comprised of 18 members.
Panel
Members are senior leaders who represent a cross-section
of financial reporting constituencies, including lenders, investors, and owners,
as well as preparers and auditors. All members have both extensive experience in
their field and a keen and broad interest in financial reporting for private
companies.
In addition to the Panel members, the Panel also has invited
certain regulators and other key stakeholders to serve as
Participating
Observers.
Others will likely be invited to individual
meetings to provide their expertise to the Panel on specific
matters.
Staffing is provided by the AICPA and the FAF.
Scope of ReviewThe Panel will comprehensively
review the current system of standard setting for private companies in the U.S.,
including the following matters:
- Who are the actual users of private company financial statements and how
do they use GAAP financial statements in their decision making?
- What is the key, decision-useful information that the various users need
from GAAP financial statements?
- Are current GAAP financial statements meeting those needs? Why or why
not?
- Are the benefits of GAAP financial statements outweighing the costs of
preparing those statements for private companies?
- How does standard setting for private companies in the U.S. compare to
standard setting in other countries, both those that have adopted IFRS for
Small and Medium-Size Entities and those that have not?
- To the extent that current GAAP is not meeting user needs in a
cost-beneficial manner, what are some possible alternatives for private
company standards (e.g., separate, stand-alone standards; base-level
standards for all entities with additional disclosure requirements for
public companies) and what are the implications for standard-setter
structure and/or processes?
In addressing these matters at a
strategic level, the Panel will consider relevant studies and other reports on
private company financial reporting that have been done over the years by the
AICPA, the FAF, and others.
Panel MeetingsThe
Panel will have approximately 4-5 in-person, one-day
meetings.
The meetings will generally be held in either New York or Norwalk, CT, although
one of the meetings may be held elsewhere.
Because of the high level of
interest in the Panel’s work from various reporting constituencies, the Panel
will generally meet in public sessions, with webcasting facilities available to
all interested parties. The Panel meetings may also involve private sessions, at
the discretion of the chairman, for administrative matters and report
drafting.
Depending on the needs of the Panel, sub-panels may be formed
to consider various issues in-between panel meetings.
Additional
InformationIf you would like more detailed information about
Blue-Ribbon Panel, call or write:
Jeffrey D. Mechanick,
Assistant Director
Financial Accounting Standards Board
401 Merritt
7
Norwalk, Connecticut 06856-5116
United States
Phone:
(203)-956-5301
Fax: (203)-849-9470
Email:
jdmechanick@fasb.org