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Private Company Accounting: The Good, the Bad, and the Ugly

Scott Taub | November 26, 2013

It's been less than a year since the first meeting of the Financial Accounting Standards Board's Private Company Council. The PCC is charged with identifying areas where Generally Accepted Accounting Principles can be simplified for private companies because the users of their financial statements do not need the information imparted by the more difficult or detailed accounting requirements.

I was glad to see the PCC created. I believe there are areas where small changes could make financial reporting much easier with only a minimal effect on quality. Since any alternatives proposed by the PCC must be approved by FASB before taking effect, I figured that the chances of unwarranted differences between private and public company GAAP were low. Besides, users of private company financial statements could always ask for financial statements reflecting a...

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