The Financial Accounting Foundation’s board of trustees is reaching out for comments on how well the Private Company Council has been performing.
The FAF established the PCC three years ago in response to complaints that the Financial Accounting Standards Board, which it also oversees, was not paying enough attention to the concerns of accountants who work with privately held companies. On Thursday, the FAF trustees issued a Request for Comment seeking stakeholder input as part of an assessment of the PCC’s effectiveness, accomplishments, and future role in setting standards for private companies.
The assessment is supposed to help the trustees determine whether the PCC is fulfilling its mission and meeting its primary objectives, and whether they should make any changes in the PCC’s structure that would improve the PCC’s effectiveness. In the May 2012 report that established the PCC, the trustees said they would conduct an overall assessment of the PCC following its first three years of operation.
“The PCC has made significant progress in addressing issues that are important to private companies and the wider financial reporting community,” said FAF chairman Jeffrey J. Diermeier in a statement. “Going forward, the PCC will need to balance the demands of its role as an advisory body to the FASB with its responsibility to identify and help resolve private company financial accounting and reporting issues that arise in current GAAP. We are seeking stakeholder input to help determine whether the identified improvements will help the PCC achieve this balance.”
In the Request for Comment, the trustees identify a number of possible improvements to the PCC based on initial informal feedback they have already received—some of which the PCC and FASB have begun to implement. Among the possible improvements on which the trustees are seeking comment are:
The PCC should continue to establish working groups for select FASB projects.
There should be a consistent and continuous feedback mechanism among the PCC members and FASB members and staff on active FASB projects.
The PCC should continue transitioning to a body that primarily provides input on active FASB agenda projects.
PCC members should participate as their schedules allow in outreach performed by the FASB with private company stakeholders.
The FAF Appointments and Evaluations Committee should continue to seek individuals that have the requisite profile to advise the FASB on active projects.
The document also includes questions for stakeholder feedback. Among the issues on which the trustees are seeking comment are:
Has the PCC been successful in proposing alternatives within GAAP that address the needs of private company financial statement users?
Has the PCC been effective as an advisory body to the FASB?
What organizational or procedural improvements to the PCC are needed?
Are further changes to the standard-setting process for private companies warranted?
Stakeholders should email their written comments to PCCReview@f-a-f.org by May 11, 2015.
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