The passage of a resolution directing AICPA management to work with the Financial Accounting Foundation and FASB to identify and implement a process that would evaluate, where appropriate, potential changes in recognition, measurement, and disclosure from current generally accepted accounting principles (GAAP) as applied by public companies is very welcome. The aim is to evaluate potential changes to GAAP for privately-held, for-profit companies.
The AICPA Council's recent action indicates an understanding that private company financial reporting can be structured so it is markedly different from financial reporting for public companies. The underlying motivation would be to alleviate some of the cost and burdens that private companies now experience in complying with current GAAP without sacrificing consistency and comparability among companies. The vote was a direct result of the findings in the AICPA's Private Company Financial Reporting Task Force Report issued in March.
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