Last month the American Institute of Certified Public Accountants (AICPA), the Financial Foundation (FAF) and the National Association of State Boards of Accountancy (NASBA) formed a joint panel to examine the need for separate accounting standards for private companies. According to the press release from the AICPA:
The panel will provide recommendations on the future of standard setting for private companies, including whether separate, standalone accounting standards for private companies are needed. Members of the panel will represent a cross-section of financial reporting constituents, including lenders, investors, owners, as well as preparers, auditors, and regulators. Joining the FAF and AICPA as sponsors of the panel is the National Association of State Boards of Accountancy.
In the past, various panels have been created; however, their focus was primarily on technical issues, and not accounting standards. Berry Melancon, AICPA President and CEO, recently stated “The time has come for a new look at the policy issues of how U.S. generally accepted accounting principles are established for private companies.”
The panels will likely make recommendations later in 2010. This is not expected to be a multiyear project. The Chairman and other members of the panel are to be named later this month.
Other countries are also moving towards a separate set of accounting standards for private companies. In October 2009, the Canadian Accounting Standards Board (AcSB) approved separate standards for private companies, which will be effective for years beginning on or after January 1, 2011.
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