Private Companies Accounting Standards

The AICPA, the Financial Accounting Foundation (FAF), FASB’s parent organization, and the National Association of State Boards of Accountancy (NASBA) are sponsoring a blue–ribbon panel that is charged with making recommendations on the future of standard setting for private companies. They will take on the issue of whether separate accounting standards are needed for private companies

This is not a new issue for the accounting profession. In the past other groups have wrestled with questions about accounting standards for U.S. private companies, but they mostly focused on technical issues. This panel is unique in that it has support from standard setters, the CPA profession, and state regulators.

The chairman and members of the panel will be named in January. Members of the panel will include individuals representing a variety of financial reporting constituencies, including lenders, investors and owners as well as preparers, auditors, and regulators.

While no deadline has been set for the panel’s work, recommendations are likely to come in 2010.

Let us know what you think. Should there be a separate set of accounting standards for private companies?

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