At its meeting yesterday, the FASB discussed comments received on the proposed definition of a public business entity (PBE). This definition is central to establishing which entities will be eligible to elect the accounting alternatives being developed by the Private Company Council, including simplified accounting for goodwill, intangibles, interest rate swaps, and variable interest entities.

On the basis of the definition originally proposed, an entity would be deemed a PBE if it met any one of five specific criteria, such as the filing of financial statements with the SEC. The FASB discussed feedback received from stakeholders on each criterion and ultimately agreed to retain all five without substantial modification. For details about the specific revisions, see the FASB’s Summary of Board Decisions.

The FASB also affirmed its earlier decision not to amend related definitions in the FASB Accounting Standards Codification at this time (i.e., similar existing definitions of public and nonpublic entities would not be superseded). Such an initiative would be separately considered as a future agenda item.

The FASB directed the staff to draft a final standard, which is likely to be released in conjunction with the finalization of the private-company decision-making framework later this year. The standard would become effective upon the first use of the new definition in a subsequent standard.