Proposal to improve FASB consideration of private company views
09 Jun 2006
The US Financial Accounting Standards Board and the American Institute of Certified Public Accountants have jointly issued an Invitation to Comment on a joint proposal titled Enhancing the Financial Accounting and Reporting Standard-Setting Process for Private Companies.
Under the proposal, the FASB would implement certain improvements to enhance the transparency of its standard setting process for private companies and consider input from private company constituents. The press release notes that in the United States there are 17,000 companies registered with the SEC and 20,000,000 private (non-registered) companies. Specifically:
- 1. The FASB would make certain improvements to its current processes for determining whether differences are needed in prospective and existing accounting standards for private company financial reporting.
- 2. The FASB and the AICPA would jointly sponsor and fund a committee designed to increase private company constituent input in the standard-setting process. In assessing the need for differences for private companies in recognition, measurement, disclosure, and presentation, the FASB will consider the needs of users of financial statements as well as cost-benefit considerations.