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Journal entry — AIPCA/FAF/NASBA panel awards “blue ribbons” to new alternatives for U.S. GAAP for private companies

Published on: Oct 08, 2010

Today, the AICPA/FAF/NASBA “Blue Ribbon Panel” on Standard Setting for Private Companies (the “Panel”) held its fourth meeting, continuing its deliberations and discussions on alternatives to improve the current standard-setting system for private companies.

Established in December 2008, the Panel is charged with providing recommendations on the future of standard setting for private companies, including whether separate stand-alone accounting standards for private companies might be needed. Panel members represent a cross-section of financial reporting constituencies, including lenders, investors, owners, preparers, auditors, and regulators. During its previous meetings, the Panel reached a consensus that the current status quo is unacceptable, that U.S. private companies should not be at the forefront of the movement for the United States to adopt IFRSs, and that the current conceptual framework would need to be augmented to serve as a basis for standard-setting activities for private companies.

At today’s meeting, the Panel discussed public comments and feedback received since its previous meeting in July. On the basis of a majority vote, the Panel reached a consensus that a separate standard-setting body should be formed to address which provisions of FASB-issued guidance should apply to private companies. The Panel will issue a final report of its formal recommendations to the Financial Accounting Foundation (FAF) in January 2011. The Panel’s report will be made available to the public, and the FAF’s resulting action plan is expected to be exposed for public comment before the finalization of a plan.

The Panel’s next meeting is scheduled for December 10.

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