The Private Company Council voted at a meeting on Tuesday to finalize two alternatives within U.S. GAAP, for accounting for interest rate swaps, and for accounting for goodwill in a business combination for private companies. The two alternatives will now go to the Financial Accounting Standards Board for discussion and possible endorsement.

The proposed GAAP alternative for accounting for interest rate swaps would give private companies other than financial institutions the option to use a simplified hedge accounting approach to account for certain types of interest rate swaps that are entered into for the purpose of economically converting variable rate interest payments to fixed-rate payments. The alternative would also extend the exemption from certain fair value disclosures to private companies for which such swaps are their only derivatives.

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