The AICPA Private Companies Practice Section Technical Issues Committee (TIC) has had quite a busy year advocating for private companies and their stakeholders.
In May 2019, TIC sent an unsolicited comment letter to the Financial Accounting Standards Board (FASB), urging the Board to consider delaying the effective date of the lease standard for private companies and to reconsider the Private Company Decision-Making Framework default period, which gives private companies one additional year to adopt new accounting standards. TIC sited complexities and time and effort required to adopt the new revenue standard under ASC 606 as one of the main reasons for a delay, among others. FASB responded in November 2019 by issuing an ASU to extend the effective dates for private companies to adopt the lease standard as well as the credit loss and derivatives and hedging standards, which represented a significant accomplishment for the profession.
In a September 2019 meeting, TIC provided FASB with some recommendations on practical expedients and simplification for private companies in adopting the new lease standard. FASB scheduled a roundtable in April 2020 with key stakeholders (including a TIC representative) to discuss implementation issues and lessons learned from public company adoption.
TIC also provides feedback to the Auditing Standards Board (ASB), the Accounting and Review Services Committee (ARSC), and the Professional Ethics Executive Committee (PEEC) on their projects and proposals.
In January 2020, TIC held its annual liaison meeting with the ASB, provided informal feedback related to the ASB’s recent proposal on its strategy and work plan, and followed with a comment letter that was also sent in January. The AICPA’s Chief Auditor plans to meet with the TIC at its May 2020 meeting to discuss the comments and ideas further.
Throughout 2019, TIC urged PEEC to reconsider its Interpretation related to hosting because of practice issues that have arisen. PEEC has responded with a series of podcasts and questions and answers to help clarify this guidance.
TIC is also planning to meet with ARSC in June at the Engage conference to discuss current projects and issues, including how the Financial Reporting Framework for Small and Medium-Sized Entities is referenced and incorporated in the SSARSs.
After each of its five annual meetings, a TIC Alert is sent to interested parties that provides an overview of TIC’s advocacy efforts in action. Please contact Kristy Illuzzi at Kristy.Illuzzi@aicpa-cima.com to be added to that distribution list or if you have any questions or suggestions related to TIC’s efforts.