It has been a complaint for nearly four decades. U.S. GAAP (generally accepted accounting principles) can be overly complicated and, in some circumstances, unnecessary for non-public companies.
In May, RubinBrown hosted four sold-out seminars on this very topic. Business owners and executives gathered with us to learn more about new alternatives, from both the FASB and the AICPA, that will help simplify private company financial reporting.
Joining RubinBrown were top executives from the AICPA who helped compare the differences between U.S. GAAP and FRF for SMEs and the impact it can have on privately held businesses.
The two executives who presented were:
- Dan Noll, AICPA Accounting Standards Director: Dan’s primary responsibilities include working with the Financial Reporting Executive Committee (FINREC) in arriving at AICPA positions on financial reporting matters and in providing external financial reporting guidance.
- Robert Durak, AICPA Director of Private Company Financial Reporting: Bob oversaw the development of the AICPA’s framework for smaller businesses and staffed the Private Company Financial Reporting Committee (PCFRC) for six years. He currently directs the AICPA’s new Center for Plain English Accounting.
The seminar focused on the recent relief available to private companies. Areas of focus were as follows.
Relief first began to take shape with the formation of the Private Company Council (PCC) in May 2012. The PCC was established to explore simplification to nongovernmental GAAP and have consulted extensively with the AICPA and other key constituent groups.
During 2013, the AICPA released a new accounting option (Financial Reporting Framework for Small and Medium Sized Entities or FRF for SMEs) that provides privately held, owner-managed businesses a less complicated alternative to GAAP but still provides meaningful financial results. Click the link below for a toolkit of references available for both companies and their lenders.
Then in late 2013, the PCC released three updates to GAAP that provide further alternatives for private companies. These three updates—accounting for goodwill, certain interest rate swaps, and certain common control leasing arrangements—along with the FRF for SMEs are widely heralded as the changes and relief that private companies have long awaited.
To view the slide deck from the sold-out Private Company Financial Reporting Seminars, please click here
RubinBrown is also editing a video from the seminar that will be posted soon. Click below to view this as well as other valuable resources.
Private Company Council (PCC)
AICPA’s Financial Reporting Framework for SMEs (including toolkit)
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