While the Financial Accounting Foundation weighs the possibility of establishing a separate board for private company accounting standards, the Private Company Financial Reporting Committee is continuing its work encouraging the Financial Accounting Standards Board to take more notice of privately held businesses.

The PCFRC, which is a joint committee of FASB and the American Institute of CPAs, met last Friday with the board in FASB’s offices in Norwalk, Conn. This coming Friday, a meeting of the Blue Ribbon Panel on Standard-Setting for Private Companies will meet in Norwalk to discuss their recommendations for establishing a separate board that would have the authority to tweak the accounting rules to meet the needs of privately held businesses and their lenders.

PCFRC chair Judy O’Dell told me Monday how last Friday’s meeting went. The PCFRC had a joint meeting for about an hour with FASB’s Small Business Advisory Committee. They heard a presentation by Mark Schroeder, who is heading up the FAF’s post-implementation review process. The process is designed to examine how well standards issued by FASB have worked in practice.

“They will look at it from both a public company and private company viewpoint,” said O’Dell. “They’re going to be looking at process, how it was implemented in practice and whether it cured the problem it was supposed [to fix.] They are not going to be looking at how the standard was set. They will make recommendations on how the process would work. They’ll be looking at what the costs were, and what the benefits were.”

The first standard they have chosen is FIN 48, the financial interpretation standard governing uncertainty in income taxes. The PCFRC gave Schroeder some of the committee’s thoughts on FIN 48, which has been in effect for public companies since 2006 and for private companies since last year.

The PCFRC and FASB also had an extensive discussion on the Emerging Issues Task Force’s Issue 10-A, which pertained to the accounting for goodwill impairment and the specific issue of what to do if a company has negative equity. “We had raised some issues with the EITF as to why all private companies could not use this method, and we had a discussion of how the goodwill issues affect private companies,” said O’Dell.

The PCFRC and FASB also had a long discussion on FASB’s proposed leasing standards, which it has been revising as part of its convergence project with the International Accounting Standards Board, because the deadline on submitting a comment letter is the 15th of the month. “We recognize that the theory is probably good, but we had questions about practical implications,” said O’Dell.

During the public part of the meeting Friday with the full board, the topic that took up most of the meeting was how the PCFRC could assist FASB in coming up with a framework for making decisions on when and how private company standards can be addressed. The PCFRC and FASB also discussed revenue recognition and leases, multiemployer plans, and the exposure draft from FASB on the effective dates and transition of upcoming standards. “Certainly it was a very robust discussion,” said O’Dell. “The board asked a lot of questions about how things work in private companies.”

“We did not discuss the Blue Ribbon Panel to any great extent,” she added. “We’re waiting to see what the panel will come up with.”

You can tune in to a webcast on the deliberations of the Blue Ribbon Panel on Friday at FASB’s website at www.fasb.org.