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CFO TO CFO
20
Separate Private vs.
Public Company GAAP:
Are We at a Tipping Point?
IN JANUARY 2011, the Blue-Ribbon Panel on Standard
Setting for Private Companies issued its long-awaited report.
The panel’s key recommendation — to establish a separate
private company standards board alongside the existing
Financial Accounting Standards Board, which would be tasked
with providing “appropriate and sufficient exceptions and
modifications”1 to existing GAAP for private companies — is
just one more dynamic that today’s private company CFO
needs to comprehend.
As background, in December 2009, the American Institute of
Certified Public Accountants (AICPA), the Financial Accounting
Foundation (FAF) and the National Association of State Boards
of Accountancy (NASBA) established a “blue-ribbon” panel to
address how accounting standards can best meet the needs of
users of U.S. private company financial statements.2 The panel
was charged with providing recommendations on the future
of standard setting for private companies to the FAF Board of
Trustees, the parent organization of the Financial Accounting
Standards Board (FASB). Its January report is the result of
that work.
Much has been written and discussed concerning the lack
of relevance of a growing list of GAAP pronouncements as
promulgated by the FASB from the private company perspective.
The FASB’s almost exclusively public company focus has led
many in the profession, and in business, to clamor for some
much needed relief. Even smaller public companies have
WWW.CFOSTUDIO.COM / 1ST QUARTER 2012
By Tim Anglim, President
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