AICPA releases report on GAAP for private companies in the US
The American Institute of Certified Public Accountants (AICPA) has released a report from its Private Company Financial Reporting Task Force recommending changes to the Generally Accepted Accounting Principles (GAAP) for private companies. The task force conducted extensive research and based its conclusions on the input of more than 3,700 responses from those impacted. In response to the task force's findings, AICPA, Financial Accounting Foundation (FAF) and Financial Accounting Standards Board (FASB) have agreed to work together to explore possible changes to GAAP for private companies.
Whether the general purpose financial statements for private companies, prepared in accordance with GAAP meet the financial reporting needs of constituents of that report; and whether
The cost of providing GAAP financial statements is justified compared with the benefits they provide to private company constituents.
The report concludes that a majority of the constituencies believe it would be beneficial if the GAAP reporting were different for private companies. The task force also unanimously recommended that a process be established to evaluate potential changes to GAAP in order to improve the usefulness of private company financial reporting.