The Private Company Council that will help set accounting standards for privately held businesses has decided to tackle three main projects for its agenda.

The PCC was established by the Financial Accounting Foundation last year and will work with the Financial Accounting Standards Board, which is also overseen by the FAF, on recommending differences to accounting standards for private companies (see Atkinson: PCC Marks ‘Cultural Change’ in Standard-Setting). The PCC held its second meeting on Tuesday and decided to focus on three projects:

• Consolidating variable interest entities, specifically when applied to related party arrangements, as referenced in Accounting Standards Codification Topic 810, Consolidation (formerly FIN 46(R) and FAS 167)

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

• Recognizing and measuring various identifiable intangible assets acquired in business combinations, including the use of Level 3 fair value measurements and the disclosures associated with them, as referenced in ASC Topic 805, Business Combinations, and ASC Topic 350, Intangibles—Goodwill and Other (formerly FAS 141(R) and FAS 142).

In their first joint standard-setting activity, the PCC and FASB voted to seek additional public input on a proposed private company decision-making framework. The framework outlines criteria to determine whether and in what circumstances it is appropriate to adjust financial reporting requirements for private companies following U.S. GAAP.

The decision-making framework is supposed to help the PCC and FASB identify opportunities to enhance the relevance to users and reduce the cost and complexity of preparing private company financial statements in accordance with U.S. GAAP. The proposal is expected to be re-exposed in March, with a 90-day comment period.

“Today, the PCC made significant progress in its effort to improve financial reporting for private companies by adding three projects to the agenda, moving forward to re-expose the proposal on the private company decision-making framework, and seeking new research on stock-based compensation and development stage enterprises,” said PCC chairman Billy M. Atkinson in a statement.

The PCC also directed FASB’s staff to develop agenda research memoranda on two additional topics: stock-based compensation and development stage enterprises. The PCC asked the staff to continue research on interest rate swaps with more than one counterparty or lending arrangement.

At the PCC’s first meeting in December, it identified the subject of accounting for income tax uncertainty as another item it might add to its agenda (see Private Company Council Holds First Meeting). But at its second meeting on Tuesday, the PCC did not formally add to its agenda accounting for uncertain tax positions (as referenced in ASC Topic 740, income tax, formerly FIN 48). PCC members did not identify specific practice issues that require immediate attention, but they acknowledged the desire to continue to solicit feedback from stakeholders on this issue.

The PCC also continued its discussion of FASB’s project on definition of a nonpublic entity and provided input to the FASB on other projects, including going concern, revenue recognition, and the Emerging Issues Task Force’s project on recognition of new accounting basis (pushdown) in certain circumstances. All PCC meetings will be archived on the FAF website.