Private Company Council to be Refurbished After Review
The board of trustees of the Financial Accounting Foundation has made a decision of overhauling some of the Private Company Council procedures that offer input to Financial Accounting Standards Board on matters concerning companies that are held privately.
FAF is the overseer of both FASB and PCC. PCC was set up three years ago in order to respond to greater roles demand for a higher role for private companies in the process of setting standards. On Wednesday, FAF trustees released a report on a 3 year review of PCC recommending several changes in oversight and procedures in improving the effectiveness.
The prior Private Company Financial Reporting Committee was succeeded by PCC who were given the ability in voting changes which it would then be recommended to FASB. This was established after FAF and the American Institute of CPAs together with National Association of State Boards of Accountancy who set a Blue-Ribbon Panel on Private Companies Standard setting. While AICPA pushed for a standard setting board that was independent for private companies, ultimately, the new PCC had some autonomy while leaving the exact standard setting role together with FASB.
The chairman of NASBA, PCC, AICPA, Billy Atkinson expressed some fears that the group may lose autonomy at the end of the three year conclusion review. However, the new report seems to indicate that PCC will continue to play a major role in standard setting even with the latest procedures which may strengthen the group.
Updated procedures focus mainly on the manner in which PCC offers FASB with private perspectives of the company with regard to the active agenda projects on FASB and the manner in which PCC communicates the perspectives to their shareholders. Established in 2012 by trustees, PCC is the primary advisory board to FASB seeing the most suitable treatment for accounting standards of private companies under FASB’s active consideration.
The trustees of FAF amended the PCC Operating Procedures and Responsibilities in order to reflect various improvements before issuing a final report which concluded its review of three years of PCC together with operations. The review’s objective is in determining if the PCC is meeting its mission and primary responsibilities and offer PCC’s continued assessment, effectiveness and role.
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