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U.S. comment letter on public business entities

Published on: Sep 23, 2013

An excerpt from the comment letter is shown below:

We believe that it is important for the Private Company Council (PCC) and FASB, when defining a public business entity (PBE) and determining which entities are eligible to use the PCC alternatives endorsed by the FASB, to use the observations in the proposed Private Company Decision-Making Framework — A Guide for Evaluating Financial Accounting and Reporting Guidance for Private Companies (the “decision framework”) regarding the important factors that differentiate private companies from public companies. Accordingly, we believe that any final decisions regarding this proposed ASU should be made in conjunction with the final decision framework.

Although we understand the Board’s desire to leverage some of the existing, more rules-based criteria for performing the PBE assessment, we believe that the definition of a PBE should be based on a principle that takes into account the above-cited differential factors. We recommend that the Board consider the following definition:

A PBE is an entity whose U.S. GAAP financial statements are made readily available to the public to provide financial information to holders (and potential holders) of debt or equity interests that are traded in a public market.

Full text of the comment letter is available below.

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