|The Blue-Ribbon Panel (AICPA, FAF, NASBA and FASB) on Standard Setting for Private Companies |
Was created to address how accounting standards can best meet the needs of users of U.S. private company financial statements. In January 2011 the report was issued.
The Panel has concluded that there are urgent and growing systemic issues that need to be addressed in the current system of U.S. accounting standard setting. The Panel members believe that the system has not done a sufficient job of
- understanding the information that users of private company financial statements consider decision-useful and how those information needs differ from those of users of public company financial statements; and of
- weighing the costs and benefits of GAAP for use in private company financial reporting.
These issues have caused a lack of relevance of a number of accounting standards for many users of private company financial statements and an overall level of complexity in U.S. GAAP that continues to concern preparers of private company financial statements and their CPA practitioners.
The report proposes major and other enhancements aimed at fostering an accounting standard-setting system that would seek to maintain a high degree of financial reporting comparability for business entities, regardless of capital structure, but also significantly increase the chances of effecting potential differences, where warranted, in measurement, recognition, and presentation, and not just disclosure.
Read the report