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After long deliberation, the Norwalk-based Financial Accounting Foundation established a brand new council to improve how bookkeeping standards are set for private companies, even as the country's largest accountancy group revealed plans to develop new rules for small companies. According to AICPA, the vast majority of stakeholders agreed with the panel that action must be taken to make private company financial statements more relevant, less complex and cost-beneficial. GAAP does not fit all companies, especially smaller, privately held businesses," Gregory Anton, a Colorado accountant who is AICPA chairman, said in a statement. Generally Accepted Accounting Principles (GAAP) are necessary to help people get a better view of company financials. "The plan approved by the trustees strikes an important balance," Polley said in a statement. The American Institute of CPAs (AICPA), meanwhile, plans to develop a financial reporting framework to meet the needs of some privately held small and medium-size businesses, promising it will be a less-complicated and less-costly alternative to GAAP. FAF's Private Company Council (PCC) initiative stems in part from a panel formed in 2009 by it, AICPA and the National Association of State Boards of Accountancy. "We recognize that the FAF has moved in the right direction and the AICPA will continue to be fully engaged with the FAF and the Private Company Council. But at the same time, the plan ensures comparability of financial reporting among disparate companies by putting in place a system for recognizing differences which will avoid creation of a 'two-GAAP' system. While doing so, we will also use our resources and expertise to develop an enhanced … financial reporting framework that is objective, relevant and responsive to the concerns of preparers and users of small and medium private company financial statements where GAAP financial statements are not required. This month, FAF issued a call for nominations for PCC members, who will have a three-year term and may be reappointed for an additional term of two years. FAF CEO Terri Polley signaled her support for AICPA's new project. "One-size U. In response to concerns by some, FAF trustees agreed to create a smaller council than originally proposed and to have it meet at least five times a year, a more frequent schedule than first envisioned. PCC will have nine to 12 members, to include a wide range of users, preparers, and practitioners with substantial experience working with private companies. "There is evidence that improved financial reporting helped spur investment at critical moments in our economic history," Polley wrote in April. |
Friday, 8 June 2012
AICPA mulls GAAP alternative
