In January 2011, the 'Blue-Ribbon Panel' addressing how U.S. accounting standards can best meet the needs of users of private company financial statements issued a report of its recommendations to the Financial Accounting Foundation (FAF) Board of Trustees. The recommendations included the creation of a new board, to be overseen by the FAF, that would focus on making exceptions and modifications to U.S. GAAP for private companies. However, the Trustees concluded that creating a separate standard-setting board for private companies would likely lead to the establishment of two separate sets of US accounting standards, a result that seemed not desirable.

The "Private Company Standards Improvement Council" (PCSIC) now called for in the plan would have the authority to identify, propose and vote on specific improvements to US accounting standards for private companies. However, changes would be subject to ratification by the Financial Accounting Standards Board (FASB). Also, the PCSIC chairman, who would be selected and appointed by the Trustees, would be a FASB member. The FASB believes that it is well prepared for this move of the Trustees by having recently appointed a likely candidate for this position as a board member.

In publishing the new plan, the FAF has concluded, as the Blue-Ribbon Panel has done before, that mandating the use of the IFRS for SMEs in the United States is not appropriate at the current time.

Comments on the plan are requested by 14 January 2012.

Please click for (all links to FAF website):

• FAF press release
• Plan to Establish the Private Company Standards Improvement Council
• Executive summary of the plan
• Podcast interview with FAF President and CEO Terri Polley