According to an article on CFO.com,Turf War over Private-Company GAAP, The Financial Accounting Standards Board (FASB) set up a new section on its website dedicated to the issues most relevant to private companies. The most important of these issues is this: The Financial Accounting Foundation (FAF), FASB’s overseer, is considering recommendations put forth by a panel from the American Institute of Certified Public Accountants (AICPA). According to the article, “the AICPA wants the FAF to set up a separate board … to handle GAAP modifications for private companies. FASB, however, maintains it should have the rulemaking responsibility.” (I know it’s hard to follow all these acronyms!)
A “recent survey by Grant Thornton indicates that more than 50% of private-company CFOs don’t mind having FASB regulate the accounting standards. Only 22% support a separate body”.
Apparently there’s some jockeying between FASB and AICPA over who will govern GAAP rules for private companies, should those come into being. (And that looks like a certainty. It’s just a matter of time…a few years, perhaps?) If you want to contribute your input, as a business owner or CFO of a small or medium enterprise, you can visit the FASB website and contact one of the eight members assigned to take comments and feedback from and on non-public entities. Go to the Nonpublic Entities Stakeholders page and click on one of the links you deem most applicable.
For those who are confused by all the acronyms:
FASB – Financial Accounting Standards Board – establishes financial and accounting standards in the U.S.
GAAP – Generally Accepted Accounting Principles – “common set of accounting principles, standards and procedures that companies use to compile their financial statements” (definition courtesy of Investopedia)
FAF – Financial Accounting Foundation – the private sector entity that operates/runs/oversees FASB
AICPA – American Institute of Certified Public Accountants – professional association of CPAs in the U.S.