Last week at the AICPA Fall Council meeting, we witnessed accounting history being made as two three more acronyms were born. In a profession known for acronyms, these stand out as they increase options for accounting under the top acronym of GAAP.
First we heard from Billy Atkinson (Texas), the new chairman of the PCC (or Private Company Council), recently appointed by the FAF (Financial Accounting Foundation). Many CPAs have not heard (or don’t recall) this important organization, which is the parent of the FASB and GASB. For more information, see the AICPA recap here.
The first meeting of the new PCC is set for Dec. 6 in Norwalk, Conn.
Watch this video interview that Bill Sheridan and I conducted with FAF President Terri Polley for some great insights about where FAF is heading and why.
Second, we heard from David Morgan and Robert Durak of the AICPA’s task force for Financial Reporting Framework for Small and Medium-sized Entities (FRF-SME) as they unveiled the soon-to-be-proposed FRF-SME standardized form of OCBOA that came out of the FAF Private Company Reporting process. Actually, they are also proposing a new acronym for OCBOA — SPF, or Special Purpose Framework. This is the AICPA responding to the call for separate private company standards and reminds me a lot of the IFRS SME standards (68 pages of simple accounting concepts for small businesses). The Journal of Accountancy article, Framework for SMEs emphasizes relevance, historical costs, provides a great overview of the proposed standard due out any day now for comments.
These are significant developments for private company accounting which has been debated for almost four decades. In the last two years, MACPA has submitted three comment letters and a whitepaper form our Private Company Reporting Task Force. It is good to see some final resolution and action by the regulators on this important subject.
Wow … actually, that’s three new acronyms born!
The PCC, FRF-SME and SPF — and if you did not know about OCBOA (Other Comprehensive Basis of Accounting) or FAF, it could be five acronyms.
Makes me very glad I will not be taking the CPA exam again (I hope).
CPA Success coverage of Private Company Reporting: