FEI Members Part of FASB-AICPA Private Company Initiative

May 11, 2007

FEI Summary

The Private Company Financial Reporting Committee (PCFRC), jointly sponsored by the Financial Accounting Standards Board (FASB0 and the American Institute of Certified Public Accountants (AICPA), held its inaugural meeting in Chicago last week (May 10-11).

Two FEI members, Kathy Barry, CFO of Highland Capital Partners and Daryl Buck, Vice President and CFO, Reasor's Inc., serve on the PCFRC.

Serena Dávila, FEI's Director of Technical Activities in FEI's Washington, D.C., office, was in attendance at the public meeting as an observer.

"It was a productive first meeting," said Dávila. She noted it was especially helpful to have FASB Board Member George Batavick at this inaugural meeting.

Others addressing the group, as noted on the meeting agenda, were Dan Noll, director of Accounting Standards at the AICPA, and Russ Golden and Paul Glotzer of FASB staff.

Priority Projects Decided

PCFRC members decided at the May 10-11 meeting that the following projects will be among their "priority" projects - i.e., in advising FASB on the needs of private companies and users of private company financial reporting as FASB considers standard setting in these areas: 

·         Prospective standard-setting projects:

   o        Proposed FSP FAS 154-a (materiality) (NOTE: FEI's Committee on Private Companies 
       (CPC) Standards Subcommittee sent a comment letter.) Other comment letters are
        available here.

    o         Business Combinations (joint project of FASB-Inetnational Accounting Standards Board
          (IASB)).

o        Financial Statement Presentation (joint project of FASB-IASB).

o        Liability-Equity project (joint project of FASB-IASB).

·         Existing GAAP standards: 

o        FIN 46R (variable interest entities (formerly called Special Purpose Entities (SPEs) Special Purpose Vehicles (SPVs) or Special Purpose Companies (SPCs)),

o        FIN 48 (Accounting for Uncertainty in Income Taxes),

o        FAS 123R (stock options).

FEI as a Resource

FEI's Dávila told the group that FEI (through FEI's Committee on Private Companies) can be a resource to this new FASB-AICPA joint committee on Private Company Financial Reporting.

Additionally, a research report published by FEI's research affiliate, the Financial Executives Research Foundation (FERF), "What Do Users of Private Company Financial Statements Want?" was among the publications listed under meeting materials (background materials) for the initial FASB-AICPA PCFRC meeting.

Further information about the FASB-AICPA PCFRC is available at www.pcfr.org. Information about FEI's Committee on Private Companies (CPC) is available here and recent issues of interest to private company financial executives are spotlighted here.

Dávila’s detailed notes from attending the May 10-11 FASB-AICPA PCFRC meeting are available to FEI members only here. (For information about FEI membership, click here.)

Prepared by Serena Dávila, sdavila@FinancialExecutives.org Director, Technical Activities, Financial Executives International (FEI), and Edith Orenstein eorenstein@FinancialExecutives.org, Director, Technical Policy Analysis, FEI. This summary does not represent FEI opinion unless specifically noted above.