The Private Company Council (PCC), established by the Financial Accounting Foundation, is a new body charged with improving the process of setting accounting standards for private companies. The PCC’s two primarily responsibilities are 1) to determine whether exceptions or modifications to existing nongovernmental U.S. Generally Accepted Accounting Principles (U.S. GAAP) are necessary to address the needs of users of private company financial statements and 2) identify, deliberate, and vote on any proposed changes, which will be subject to endorsement by the FASB and submitted for public comment before being incorporated into GAAP.
Billy Atkinson, PCC chair, announced that accounting for uncertainty in income taxes (formerly FIN 48) will be among the first issues addressed by the newly formed PCC. Other issues that Atkinson referred to as ‘low-hanging fruit’ would also be addressed early by the PCC. Among these issues are:
- Fair value
- Variable interest entity consolidation
- Complexity of derivatives, including interest rate swaps
- Accounting for warrants as liabilities
- Elements of business combination accounting
The PCC is scheduled to meet for the first time in the fourth quarter of 2012, and will meet at least five times a year. In addition, the PCC will be FASB’s primary adviser on private company issues during the development of new standards.
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