What Happens to Private Companies when Public Companies Move to International Financial Reporting Standards?
By Judith H. O’Dell, CPA, CVA Private companies contribute half of the United States’ economic output. There are more than 22 million private businesses in the U.S., compared to approximately 17,000 public companies. The Financial Accounting Standards Board (FASB) created the Private Companies Financial Reporting Committee (PCFRC) in 2007 as part of a broad initiative by the FASB and the American Institute of Certified Public Accountants (AICPA). The goal of the PCFRC is to further improve the FASB’s current standard-setting process to better meet the financial reporting needs of U.S. private companies and the users of their financials. More information about the PCFRC and its recommendations can be found at www.pcfr.org. Assuming that IFRS become GAAP for U.S. public companies at some point in the future, an opportunity arises to determine what set of GAAP best suits the needs of U.S. private company financial reporting constituents. Establishing a proper GAAP model for private compan
