CPC offers letter on standard-setting.

In an recent letter to the Financial Accounting Standards Board (FASB), the Standards Committee of FEI's Committee on Private Companies (CPC) broadly supported the proposals contained in an Invitation to Comment (ITC) issued by FASB on Enhancing the Financial Accounting and Reporting Standard-Setting Process for Private Companies.

In the letter, signed by Andy Thrower, chairman of the subcommittee, CPC said it supports the idea of improving FASB's process for determining whether differences are needed in prospective and existing standards for private company financial reporting, as well as a plan to sponsor a committee designed to boost private-company input in the standard-setting process.

CPC agreed with the contention from FASB and the American Society of Certified Public Accountants (AICPA) that user needs and cost-benefit considerations should guide any committee. The letter adds:

"We also believe that another key task for the committee will be to determine if private company user needs create objectives that are consistent with, or divergent from, the current objectives of general-purpose external financial reporting contained in the existing FASB (and proposed joint FASB/IASB) conceptual framework.

"There is a possibility of differing objectives of financial reporting for private company users. We believe that the ITC's proposed committee should be free to fully research these topics at the objective level. If the committee determines that private company financial reporting users do have differing objectives, and that those objectives are not consistent with the framework of 'general-purpose external financial reporting,' we anticipate that the FASB would consider such determination at the conceptual framework level."