The Private Company Council held its inaugural meeting on Thursday to discuss how accounting standards should be adjusted for privately held companies.

During the meeting, the PCC, which will take over the work of the Private Company Financial Reporting Committee, identified four areas to research for agenda consideration: consolidation of variable interest entities; accounting for “plain vanilla” interest rate swaps; accounting for uncertain tax positions; and recognizing and measuring, at fair value, various intangible assets (other than goodwill) acquired in business combinations. The meeting took place in the offices of the Financial Accounting Foundation and the Financial Accounting Standards Board in Norwalk, Conn.

“These four areas are often top of mind for users, preparers, and auditors of private company financial statements,” said PCC chairman Billy M. Atkinson in a statement. “We are eager to review the research, and we look forward to discussing the issues in more detail at our next meeting in February. After we discuss these issues further, we’ll make a decision about which projects to add to the PCC agenda.”

The PCC was established in May by the FAF’s board of trustees to work with FASB to determine whether and when to modify U.S. GAAP for private companies.

During the PCC’s first meeting, FASB staff members presented to the PCC the issues they had identified as being the top areas of concern by constituents who provided written input to the Blue-Ribbon Panel on Standard Setting for Private Companies in 2010, and by participants in private company roundtables held in 2010 and 2011. The PCC directed the FASB staff to develop agenda research memoranda on:

• Accounting Standards Codification (ASC) Topic 810, Consolidation (formerly FIN 46(R) and FAS 167), which involves financial reporting by companies involved with variable interest entities (organizations in which the investor holds a controlling interest that is not based on the majority of voting rights).

• Accounting for “plain vanilla” interest rate swaps, which are used to convert variable interest rates on loans to fixed interest rates, and vice versa, as referenced in ASC Topic 815, Derivatives and Hedging (formerly FAS 133).

• ASC Topic 740, Income Taxes (formerly FIN 48), which is intended to increase relevance and comparability in reporting information about uncertain tax positions.

• Recognizing and measuring various intangible assets (other than goodwill) acquired in business combinations, including providing Level 3 fair value measurements and disclosures associated with them, as referenced in ASC Topic 805, Business Combinations (formerly FAS 141(R) and FAS 142).

The following items were also addressed during the inaugural meeting:

• The official transition from the Private Company Financial Reporting Committee, including a report which summarizes recent PCFRC activities, lessons learned and suggestions on FASB projects that the PCC may want to monitor

• An update on FASB’s private company decision-making framework Invitation to Comment, including a summary of outreach and feedback

• An update on the FASB’s project on the definition of a nonpublic entity, including a summary of outreach and feedback

• A discussion on the current FASB project on going concern.

“We are very pleased to see the PCC off and running—tackling the critical financial reporting issues facing private companies,” said FAF president and CEO Teresa S. Polley. “This Council represents a critical milestone along our journey to improve financial reporting for private companies, and today is the first step in our journey. We are confident that the spirit of cooperation between the PCC and the FASB will carry us through and, more importantly, result in significant progress.”