Blue Ribbon Panel on Private Company Accounting to Hold Inaugural Meeting

The inaugural meeting of the Blue Ribbon Panel on Private Company Accounting (BRP) takes place April 12, marking the start of its review of the current system of standard setting for private companies.

Established by a the American Institute of Certified Public Accountants (AICPA), the Financial Accounting Foundation (FAF), and the National Association of State Boards of Accountancy (NASBA), the BRP was formed to address how accounting standards can best meet the needs of U.S. users of private company financial statements.  This includes a comprehensive review of the following:

• Who are the actual users of private company financial statements and how do they use GAAP financial statements in their decision making?
• What is the key, decision-useful information that the various users need from GAAP financial statements?
• Are current GAAP financial statements meeting those needs?  Why or why not?
• Are the benefits of GAAP financial statements outweighing the costs of preparing those statements for private companies?
• How does standard setting for private companies in the U.S. compare to standard setting in other countries, both those that have adopted IFRS for Small and Medium-Size Entities and those that have not?
• To the extent that current GAAP is not meeting user needs in a cost-beneficial manner, what are some possible alternatives for private company standards (e.g., separate, stand-alone standards; base-level standards for all entities with additional disclosure requirements for public companies) and what are the implications for standard-setter structure and/or processes?

Comprised of senior leaders representing a cross-section of financial reporting constituencies the Blue Ribbon Panel will include lenders, investors and owners, as well as preparers and auditors, who have both extensive experience in their field and a broad interest in financial reporting for private companies.  Key stakeholders and certain regulators have also been invited to serve as participating observers. 

Currently, the BRP plans to hold four or five one-day meetings, which will generally be public sessions because of the high level of interest in their work.  Webcasting will be available to interested parties, though private sessions may be held at the discretion of the chairman for administrative matters and report drafting. 

Once the Panel concludes its work, they will issue a report with their resulting recommendation on the future of standard setting for private companies.  This report will be sent to the FAF Board of Trustees in approximately one year and made available to the public.  The Trustees will then form a resulting action plan which is expected to be exposed for public comment prior to being finalized. 
 

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Consultant of the Quarter:  Tana VanPrapa