Johnson Lambert Summarizes How the Private Company Council Will Affect Your Organization

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In May 2012, the Financial Accounting Foundation created the Private Company Council. In an article titled, "How Will The Private Company Council Affect Your Organization?" Johnson Lambert Partner, Magali Welch and Senior Associate, Hartley B. Hartman explain and provide an in-depth review of the FAF's final report, Establishment of the Private Company Council.

The definition of PBE will have a significant impact, as it will be used by the FASB, PCC and EITF to determine the scope and applicability of future accounting and reporting guidance to private companies.

In May 2012, the Financial Accounting Foundation (FAF) created the Private Company Council (PCC). In an article titled, "How Will The Private Company Council Affect Your Organization?" Johnson Lambert Partner, Magali Welch and Senior Associate, Hartley B. Hartman explain the FAF's final report, Establishment of the Private Company Council.

Per the FAF’s final report, Establishment of the Private Company Council, the PCC is charged with the following:
1. Determining whether exceptions or modifications to existing non-governmental U.S. Generally Accepted Accounting Principles (GAAP) are required to address the needs of users of private company financial statements.
2. Serve as the primary advisory body to the Financial Accounting Standards Board (FASB) on the appropriate treatment for private companies for items under active consideration on the FASB’s technical agenda.

This means that if your organization is considered a private company, you would be allowed to follow simplified accounting standards developed by the PCC. This could be advantageous to your company and potentially reduce the cost of complying with GAAP. The question is, “What is a private company?”

To read the full Johnson Lambert article visit: https://www.johnsonlambert.com/news-blog/2013/09/12/how-will-private-company-council-affect-your-organization.

About the Authors:
Magali Welch, CPA, AIAF, CA is a Partner and Hartley B. Hartman, CPA is a Senior Associate with Johnson Lambert. Johnson Lambert is North America’s largest insurance-focused audit and tax firm, and has served the insurance industry for more than 25 years. Since our inception in 1986, we have focused on distinct industry niches where we have distinguished ourselves as technical experts with a unique depth of experience specifically relevant to our clients’ needs. We serve a national and selectively international client base including over 400 insurance and insurance services entities from our offices in Florida, Georgia, Illinois, New Jersey, North Carolina, South Carolina, Vermont and Virginia. We also service associations and other non-profit organizations as well as employee benefit plans. For more information about Johnson Lambert LLP, visit http://www.johnsonlambert.com.

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Terri Robinson
Johnson Lambert LLP
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