The pace of change in the accounting profession is not just constant - it takes place at breakneck speed.

From the International Accounting Standards Board responsible for the issuance of global accounting standards, to the Internal Revenue Service, the Financial Accounting Standards Board, the Public Company Accounting Oversight Board and the Securities and Exchange Commission, there is no shortage of accounting news, some of which is considered groundbreaking in impact. Keeping up with the fast pace of change is often accomplished through daily news alerts from various organizations. However, the daily challenge of work life gets in the way, and thus many readers will often only have a basic knowledge of pending events, rather than an in-depth understanding of the issue.

So what happens when one can finally find the time for some concentrated study focusing on a specific proposal? You might be surprised. A recent case in point: private company accounting and financial reporting standards.

With a long history of promises by regulators to try and make private company accounting and reporting standards more relevant to the ultimate users, this topic has been in the news in some form for the past 30-plus years (remember the Big GAAP/Little GAAP discussions?). As a result, many accounting professionals might not have paid close attention to the recent revolution that occurred in the area of private company financial reporting standards.

The move to finally recognize that financial reporting issues for private companies are truly different has gained significant momentum in a short period of time. This occurred when a blue ribbon panel of experienced private company accounting professionals was convened in December 2009 and finished its task exactly one year later. This 18-member committee, chaired by Rick Anderson, chief executive of Moss Adams LLP, was created by agreement of the Financial Accounting Foundation, the National Association of State Boards of Accountancy and the American Institute of CPAs. The charge to this committee was to make recommendations to the FAF about how the development and implementation of financial accounting and reporting standards for private companies conceptually might occur.

One of the most startling things concerning this topic was that the formation of the panel, its intensive consideration of, communication and consultation about, and evaluation of the critical issues involved, as well as its ultimate recommendations, all took place within one year. Expediency was the key focus of this committee, and so one might think that such a job well done might also lead to concrete results within the foreseeable future.

The ultimate outcome was a recommendation to the FAF that a separate standard-setting board be created to facilitate the development and implementation of accounting and reporting regulations for privately held companies. The second significant recommendation was the use of a standard-setting model that would formulate the standards using current U.S. GAAP as the basis, but with exceptions for private companies as appropriate.

In March, the FAF announced that it would take the recommendations under review and it expected to issue an action plan within six to eight months. Things seemed bright for private company standards. But now it appears that FASB has awakened to the realization that it might not be the body responsible for developing such standards. And guess who remarkably now seems to want to get back into the game, despite its long history of seemingly turning a deaf ear to the concerns of private company reporting needs.

Any accountant active during the past 25-30 years would have to agree that the following are reasonable statements:

Accounting standards have grown in both volume and complexity.

FASB has traditionally, and almost exclusively, focused on standard-setting for publicly held companies.

FASB members primarily have public company experience.

FASB's primary focus since the turn of the 21st century has clearly been convergence with International Financial Reporting Standards.

The desire for reporting standards for non-public companies is not a new issue.

The capital structure and operating constraints of small and medium-sized enterprises, often privately held, are substantially different from those of large multinational enterprises.

Previous attempts at developing accounting standards for privately held companies have been fruitless.

Financial statements should be developed to serve the needs of the users of such statements; in the case of privately held companies, the most common users are the banks that provide the needed capital for the growth and development of such firms.

FASB has not traditionally supported the development of separate standards for privately held companies.

So why is FASB interested now? Recent statements from its newly appointed chair reiterated hopes that FASB will be the governing body. Yet where was FASB for the past 30 years? Perhaps the fact that global standard-setting for public companies will most likely be governed by the IASB at some future point enters into the mix? But given the success and expediency with which the Blue Ribbon Panel performed its assigned charge, perhaps the FAF should consider this as a working model for the future of private company standard-setting, and act on the panel's recommendations to establish a separate standard-setting board in as expeditious a fashion as the Blue Ribbon Panel completed its charge.

For FASB, it's too little and too late.

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