On New Year’s Day, I quietly snuck out of the house to catch the early showing of “Rocky Balboa.” I didn’t know whether to be impressed for frightened by the fact that it was some 30 years ago that I went with several college friends to catch the original.
In this, the sixth and final installment of the pugilistic saga, Rocky’s face and neck are, not surprisingly, a bit craggier than in the 1976 blockbuster and his waistline not nearly as taut. Sadly, he’s a widower now, having lost his beloved Adrian to cancer, and, he’s also a small business owner operating a bustling Italian bistro in a tree-lined Philadelphia neighborhood.
As a bizarre tangent, it somehow struck me during the movie that the Big GAAP-Little GAAP debate is also in its third decade. Again, I didn’t know whether to feel dedicated or frightened that I found myself thinking about issues affecting the profession on my day off. But after several years of hearing arguments both pro and con about the need for differential accounting standards, it struck me that Rocky’s little eatery was probably the textbook definition of a business tier that would benefit from two sets of accounting standards.
I can’t pretend to envisage cinema’s most famous pugilist poring over or understanding any version of GAAP -- whether it’s written for General Electric or Chez Rocky -- but it does offer up a big-screen example of this ongoing debate.
Nor will I take a position on the subject matter, as I struggle with Quicken, let alone the massive 1,000-plus page tome that is GAAP.
Proponents maintain GAAP is written for public companies, which tend to be larger and therefore can easier deal with complex standards without being figuratively crushed.
But there’s been a modicum of progress to potentially resolving this debate.
In December, the Financial Accounting Standards Board and the American Institute of CPAs named Judith H. O’Dell as chair of a new Private Company Financial Reporting Committee. The committee will be comprised of the 13 people from various reporting and financial sectors who will provide recommendations to FASB.
Meanwhile, the London-based International Accounting Standards Board has just proposed a standard that would apply to non-public companies that issue financial reports.
As a fight fan I’ll freely admit that I’m glad we’ve probably seen the last of Philadelphia’s favorite warrior.
But I think it’s safe to say, we’ll have the Big GAAP-Little GAAP debate to smack around for at least a couple more rounds.
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