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.”