AICPA Governing Council Adopts Resolution Supporting Blue Ribbon Panel on Private Company Accounting Standards
CPA Profession Stands Ready to Implement Differential GAAP for Private Companies
Published October 19, 2010
NEW ORLEANS (Oct. 19) – The governing Council of the American Institute of Certified Public Accountants today adopted a resolution supporting the work of the Blue Ribbon Panel on Private Company Standards.
“The CPA profession stands ready to help implement a differential GAAP model for private companies, as determined by a separate private company accounting standards board,” according to the resolution which passed by an overwhelming voice vote.
The 265-member Council is the governing body of the U.S. accounting profession. Representatives of CPA societies from all 50 states and 4 U.S. jurisdictions meet twice a year to address current issues in the profession and provide governance for the AICPA on behalf of its 369,000 members worldwide.
The Blue Ribbon Panel is a joint committee of the Financial Accounting Foundation, which oversees the Financial Accounting Standards Board (FASB) in Norwalk, Conn., the National Association of State Boards of Accountancy (NASBA) and the AICPA. GAAP, or Generally Accepted Accounting Principles, are established by the FASB. At its Oct. 8 meeting in New York, a majority of the Blue Ribbon Panel members voted to recommend the FAF establish a new standard setting board to address the needs of private company financial statement users.
There are 29 million privately held companies in the U.S.,7.6 million of which have paid employees, representing half of the nation’s GDP according to the U.S. Census Bureau. Many are small- and medium-sized organizations that report to a narrower range of financial statement users, such as lenders, venture capitalists, and insurers.
The resolution expressed appreciation of the work for the Blue Ribbon Panel and expressed thanks to the co-sponsoring organizations and the panel members, official observers and staff. It was drafted to support the work of the Blue Ribbon Panel, recognizing that the panel will adopt final recommendations to the FAF which would then consider the recommendations for future public discussion.
In October 2009, Council had expressed overwhelming support for having GAAP recognition, measurement, and disclosure differences for private companies where appropriate.