The Private Company Financial Reporting Committee met to discuss topics ranging from revenue recognition to FIN 48-d and loan-loss contingencies.
The main topic of discussion at the meeting in Washington, D.C., last week, was finalizing the committees comment letter on FSP FIN 48-d, the Financial Accounting Standards Boards proposed staff position on Application Guidance for Pass-Through Entities and Tax-Exempt Not-for-Profit Entities and Disclosure Modifications for Nonpublic Entities. The committee, which is a joint effort of FASB and the American Institute of CPAs, will basically approve what FASB has already done, according to committee chair Judy ODell. However, the PCFRCs letter will mention that there needs to be some clarification of the effective date of the standard.
The committee also spent a great deal of time during the meeting discussing FASBs revenue recognition project and its consultations with other groups. Committee members had talked with the Construction Financial Management Association to make sure they understood what the associations issues were before sending out a comment letter. ODell noted that the PCFRC does extensive outreach to other organizations such as the CFMA and Financial Executives International to act as a funneling point for leaders of private companies from different constituencies.
The PCFRC also heard from John Brennan, the new chairman of the Financial Accounting Foundation, during a closed meeting as part of the strategic outreach efforts of the FAF, which oversees both FASB and the Governmental Accounting Standards Board. FASB is planning to embark on a listening tour with constituents in five cities around the country as the board puts together a new strategic plan, according to Reuters. Brennans talk with the PCFRC was a kind of start of the FASB listening tour, said ODell. He met with us for about an hour and solicited us for our input on our working relationship with FASB. We also discussed the [FASB GAAP] codification and talked about making sure the word got out to private company constituents that this was going to be effective July 1.
Among other topics covered at the meeting, PCFRC members also had a long discussion of FASBs leasing standards project, and the points to raise in a comment letter. The committee also talked about FASBs loan-loss contingencies project and had an extensive discussion on another FASB project dealing with financial instruments with the characteristics of equity.
We were talking about some of the decisions that FASB reached at their June 10 meeting and how those might affect private companies, said ODell. How they define equity will definitely affect the balance sheet of a private company, shareholders agreements and so forth that are different from what happens in the private company world.
The committee also discussed a pending project on IFRS for small and midsized entities. Once thats final, probably sometime in July, we will discuss that at length at our August meeting, said ODell. The August meeting is scheduled to take place in Pittsburgh.