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Private Company Council meeting on decision-making framework

  • PCC meeting Image

Jul 16, 2013

Redeliberations of the guide on the Private Company Decision-Making Framework continued at the latest meeting between the FASB and the Private Company Council (PCC). The FASB and the PCC voted to finalize the guide on the basis of decisions reached during their meeting.

The guide was designed to help the FASB and PCC determine whether and in what circumstances to provide alternative recognition, measurement, disclosure, display, effective date, or transition guidance for private companies that report under U.S. GAAP.

During this meeting, the Board and the PCC:

  • Decided that the six differential factors in the guide are appropriate and directed the staff to make some nonsubstantive clarifications.
  • Decided that the requirement of quantitative information about the adoption of an alternative transition method by a private company should only be considered in limited circumstances in which the nature of the amendment to existing guidance affects information that users of private company financial statements find relevant.
  • Decided to remove special consideration of industry-specific guidance within the display module to eliminate redundancy since the guide already includes a presumption that financial statement display guidance is relevant to users.
  • Reaffirmed their consideration of access to management in the disclosure module but decided to remove access to management as a consideration in determining whether a recognition and measurement alternative for private companies should be permitted.
  • Reaffirmed their decision to generally permit a private company to select the alternatives within recognition or measurement guidance that it deems appropriate to apply; however, the Board and the PCC may require certain related alternatives be elected as a group.
  • Reaffirmed their decision that private companies generally should not be required to adopt amendments during an interim period within the fiscal year of adoption.

The FASB also added a narrow scope project to its agenda to address the concerns of both nonpublic and public companies regarding development stage entities.

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