The Private Company Council Summary

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In the article “The Private Company Council”, the author discusses the formation of PCC, Private Company Council. The author illustrates that the purpose of establishing PCC is to provide a different set of financial reporting standard for private companies in the United States. The major argument in the article is that if the FASB has the privilege to override decisions made by PCC. The author suggests two opposing points of view on the establishment of PCC. Some people believe that PCC would be beneficial because private companies have different needs for financial reporting than public companies. Having a separate standard-setting body would save time and money to compile financial statements for private companies. A simpler and compact financial statement would be present to users of financial statements of private companies. On the other hand, FASB and the Big Four state that there are no significant distinctions between the two. Some parties view that PCC is a way for private companies to bypass the …show more content…

In October 2012, FAF proposed the structure for PCC, which would reduce the responsibility of FASB over privately held companies in the United States. There are nine to twelve PCC members selected by FAF. The current PCC Chair, Mr. Candace Wright, is expected to work with FASB to ensure PCC operates to fasten the procedure of setting financial reporting provisions for private companies. Corresponding to FASB, “The PCC will review and propose alternatives within GAAP to address the needs of users of private company financial statements” (FASB, 2013). With that being said, the PCC is created to make changes to GAAP in order to better fit the users of financial statements of private companies. However, at least two-thirds of all PCC members have to agree on a GAAP alternative to forward the decision for approval of the

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