FASB, AICPA issue proposal to improve financial reporting for private companies.The Financial Accounting Standards Board Financial Accounting Standards Board (FASB) Board composed of independent members who create and interpret Generally Accepted Accounting Principles (GAAP). and the AICPA AICPA See American Institute of Certified Public Accountants (AICPA). last month issued a joint proposal intended to improve the financial reporting process for private company constituents. Specifically, the joint initiative seeks constituent feedback on proposed enhancements to the FASB's standard-setting procedures that would determine whether the board should consider differences in accounting standards for private companies within generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting . Under the proposal, the FASB FASB See: Financial Accounting Standards Board FASB See Financial Accounting Standards Board (FASB). would implement certain improvements to enhance the transparency (1) The quality of being able to see through a material. The terms transparency and translucency are often used synonymously; however, transparent would technically mean "seeing through clear glass," while translucent would mean "seeing through frosted glass." See alpha blending. of its standard-setting process for private companies and consider input from private company constituents. To that end, the FASB and the AICPA would also sponsor and fund a joint committee to serve as an additional resource to the FASB to further ensure that the views of private company constituents are incorporated into the standard-setting process. The proposal may be found at www.pcfr.org. Comments are due Aug. 15. Both organizations encourage everyone who plays a role in private company financial reporting--bank lenders, sureties/bonding companies, investors, owners and preparers, and practitioners--to review the proposal and comment on it. "Private companies are a vital force in our economy," said Robert H. Herz, FASB chairman. "[This] joint proposal represents just the latest step in our effort to explore ways to engage the participation of, and further improve the standard-setting process for, our private company constituents." "The importance of non-issuers to our capital market system cannot be overstated o·ver·state tr.v. o·ver·stat·ed, o·ver·stat·ing, o·ver·states To state in exaggerated terms. See Synonyms at exaggerate. o ," said Barry C. Melancon, AICPA President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "While only about 17,000 companies are registered with the SEC, there are over 20 million that are privately held. Private companies play a critical role in job creation and entrepreneunalism." [website] www.pcfr.org [e-mail] Dan Noll, dnoll@aicpa.org (inquiries on overall initiative) |
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