Q&A Will Aid Financial Sector and Not-for-Profits, Among Many Others
NEW YORK (Oct. 24, 2017) - The American Institute of CPAs (AICPA) has
developed a Technical
Question & Answer (TQA) document to help preparers and practitioners
determine if their organization or client is a public business entity (PBE)
under the updated U.S. GAAP definition.
The comprehensive 23-page
document was developed to help those seeking clarity in defining their PBE
status, with detailed discussion specific to entities such as depository
institutions, broker-dealers, insurance companies and not-for-profit entities.
“Making a determination as to whether you are a PBE or not is an
important business consideration,” according to Matthew Schell, CPA, a Crowe
Horwath national office partner who spearheaded the effort on behalf of the
AICPA’s Financial Reporting Executive Committee. “PBE status means an entity
must comply with FASB’s accounting standards, with implementation dates for
several – including revenue recognition and lease accounting – just around the
corner. Entities that are not PBEs, however, can take advantage of certain
scaled disclosures and other accommodations, such as using Private Company
Council-driven or other non-PBE accounting alternatives.”
In accordance
with Financial Accounting Standards Board’s (FASB) Accounting Standards Update
(ASU) No. 2013-12, Definition of a Public Business Entity—An Addition to the
Master Glossary, the FASB Accounting Standards Codification® (ASC) glossary was
amended in 2013 to include one definition of public business entity (PBE) in
future use of accounting principles.
“The AICPA recognized a need to help
financial professionals answer difficult questions related to the updated
definition,” explained Jason T. Brodmerkel, CPA, AICPA staff leader of the
Depository Institutions Expert Panel. “The importance of organizations getting
this right in such a dynamic atmosphere is key. Our efforts have included
working hand in hand with many experts with a goal of helping professionals
avoid costly implementation issues that could arise if entities misinterpret PBE
status.”