The Private Company Financial Reporting Committee took a close look at the International Accounting Standards Board’s new “IFRS for SMEs” standards at its meeting last week.

The committee, a joint effort of the Financial Accounting Standards Board and the American Institute of CPAs, spent the bulk of the two-day meeting examining the IASB’s stripped-down set of International Financial Reporting Standards for Small and Midsized Entities (see International Accounting Standards Issued for SMBs).

Various members of the committee were assigned different sections of the standards, and will discuss what might work for U.S. companies and what might not, but the committee did not reach any conclusions on adopting the standards.

“As a committee, we did not come up with any specific recommendations on that, other than that we believe the issue of private company accounting should be on FASB’s agenda at some point,” said PCFRC chair Judy O’Dell. Most of the committee believes there should be differences in accounting between public and private entities, she noted.

One issue that needs to be addressed in the “IFRS for SMEs” standards is that last-in-first-out accounting is not permitted for inventory. “That’s a real sticking point in the United States,” said O’Dell. On the other hand, the committee liked some of the simplifications in the standards, especially one that allows accountants to simply amortize goodwill, rather than do costly impairment evaluations. O’Dell recommended that accountants should visit a section of the AICPA’s site that provides a set of questions and answers on the “IFRS for SMEs” standards.

The committee also discussed the state of several other projects, such as revenue recognition and financial statement presentation, but O’Dell noted there has not been a great deal of movement on those. However, a document on FIN 48-d, “Application Guidance for Pass-through Entities and Tax-Exempt Not-for-Profit Entities and Disclosure Modifications for Nonpublic Entities,” should be issued fairly soon.

The PCFRC is also likely to write letters commenting on the applicability of proposed loan-loss disclosure standards to private companies, and the flexibility of EITF 08-01, which covers revenue arrangements with multiple deliverables.

The committee’s next meeting is scheduled for Oct. 29-30 in Charlotte, N.C.

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