FASB updates proposed private company decision-making framework

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16 Apr 2013

The United States Financial Accounting Standards Board (FASB) and the Private Company Council (PCC) have issued an updated Invitation to Comment on the private company decision-making framework. The goal of the Invitation to Comment is to assist the FASB and the PCC to ultimately develop a guide that can be use in determining whether and in what circumstances to provide alternative recognition, measurement, disclosure, display, effective date, or transition guidance for private companies reporting under US GAAP.

The updates made in this Invitation to Comment were a result of feedback received from stakeholders on its initial discussion paper issued on July 2012 and other outreach activities. The feedback was discussed during the December 2012 and February 2013 FASB and PCC joint meetings, which lead to certain proposed changes, including:

    Removing the industry-specific presumption by having the Board and the PCC consider whether the same industry-specific guidance is relevant to users of the financial statements of both public companies and private companies, and

    Allowing a private company to select the alternatives within U.S. GAAP for recognition or measurement guidance that it deems appropriate, without having to apply all the alternatives within U.S. GAAP for recognition and measurement.

Feedback on the FASB's Invitation to Comment is due by 21 June 2013.

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