12 February 2013

FASB: New projects in the PCC's agenda

The Private Company Council (PCC) added three projects to its formal agenda and voted, along with the FASB, to seek additional public comment on the FASB's staff paper on a proposed private company decision-making framework.

In its second public meeting, the PCC voted to add the following items to its agenda:

• Consolidating variable interest entities, specifically when applied to related party arrangements, as referenced in Accounting Standards Codification (ASC) Topic 810, Consolidation (formerly FIN 46(R) and FAS 167)
   
• Accounting for “plain vanilla” interest rate swaps with single counterparties, which are used to convert variable interest rates on loans to fixed interest rates as referenced in ASC Topic 815, Derivatives and Hedging (formerly FAS 133)
   
• Recognising and measuring various identifiable intangible assets acquired in business combinations, including the use of Level 3 fair value measurements and the disclosures associated with them, as referenced in ASC Topic 805, Business Combinations, and ASC Topic 350, Intangibles—Goodwill and Other (formerly FAS 141(R) and FAS 142).

In their first joint standard-setting activity, the PCC and the FASB voted to seek additional public input on a proposed private company decision-making framework. The framework outlines criteria to determine whether and in what circumstances it is appropriate to adjust financial reporting requirements for private companies following US GAAP.

The decision-making framework is intended to help the PCC and the FASB identify opportunities to enhance the relevance to users and reduce the cost and complexity of preparing private company financial statements in accordance with US GAAP. The proposal is expected to be re-exposed in March, with a 90-day comment period.

“Today, the PCC made significant progress in its effort to improve financial reporting for private companies by adding three projects to the agenda, moving forward to re-expose the proposal on the private company decision-making framework, and seeking new research on stock-based compensation and development stage enterprises”, said PCC Chairman Billy M Atkinson.

The PCC also directed the FASB staff to develop agenda research memoranda on two additional topics: Stock-based compensation and development stage enterprises. The PCC directed the staff to continue research on interest rate swaps with more than one counterparty or lending arrangement. The PCC did not formally add to its agenda accounting for uncertain tax positions (as referenced in ASC Topic 740, income tax, formerly FIN 48). Members did not identify specific practice issues that require immediate attention. Members acknowledged the desire to continue to solicit feedback from stakeholders on this issue.

Press release

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