Blue Ribbon Panel on Private Cos. Issues Report to FAF

Earlier today, the Blue Ribbon Panel on Standard-Setting for Private Companies (BRP), formed jointly by the Financial Accounting Foundation, the AICPA and the National Association of State Boards of Accountancy, issued its report and recommendations to FAF. See BRP on Private Companies Report.

As noted in a related press release: “The report calls for fundamental changes to the system of standard setting, including 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 that better respond to the needs of the private company sector. The report also recommends the creation of a differential framework — a set of decision criteria — to facilitate a standard setter’s ability to make appropriate, justifiable exceptions and modifications. The report does not advocate a move toward a separate, self-contained GAAP for private companies or a comprehensive reorganization of GAAP. The report notes BRP recommends short-term actions, using the existing Financial Accounting Standards Board to provide more exceptions.

FAF is expected to consider the BRP report and reach its own conclusions and recommendations on this and other potential issues impacting private and public company accounting. It is anticipated that FAF will issue its own recommendations for public comment.

FEI CPC-S, FERF Cited as Resources
The BRP report cites within one of the models that had been considered (Model 5) recommendations made by FEI’s Committee on Private Company Accounting (CPC-S).

Additionally, the BRP report cites in its bibliography a report previously issued by FEI’s research affiliate, the Financial Executives Research Foundation (FERF), entitled, What Do Users of Private Company Financial Statements Want?

Highlights from BRP Report
Click here for a list of highlights from the BRP report.