Private accounting rules moves one step forward

This week the Private Company Council (PCC) voted to move forward with three proposed alternatives within US Generally Accepted Accounting Principles (GAAP) that are designed to consider the financial reporting needs of private-sector entities. 

The PCC was recently established to help the Financial Accounting Standards Board (FASB) determine whether and when to modify US accounting rules for private companies.

In its third public meeting, the PCC voted to expose three proposed alternatives within US GAAP for private firms:

· Relief from separately recognizing certain intangible assets acquired in a business combination

· Allowing for the amortization of goodwill and a simplified goodwill impairment model

· Allowing two simpler approaches to accounting for certain types of interest rate swaps when a private company intends to economically convert the interest rate on its debt.

Assuming endorsement from FASB, the PCC will expose for comment more specific proposals. This is expected to occur in the next month, perhaps longer, according to one source with knowledge of the matter. 

Following the public consultation period, the PCC will consider changes to the original proposals and take a final vote. If approved, FASB will then consider a final decision on endorsement.

“Today the PCC took action on issues of critical importance to private companies, representing an important milestone in our joint efforts with the FASB to improve financial reporting in the areas of intangible assets, goodwill, and interest rate swaps,” said in a statement PCC Chairman Billy Atkinson.