Tom Barry, partner, wrote the article “Changes in Private Company Reporting” in the April 2014 edition of the Long Haul Newsletter
Historically, accounting standards have not differentiated between public and privately held companies when it came to financial reporting. What was right for a Fortune 500 publicly traded company applied to every business, large and small. The result of this one size fits all approach required many companies to spend unnecessary time and resources on overly complicated accounting policies and disclosures that provided little value to the users of the financial statements. Thankfully, things are changing. The American Institute of Public Accountants (AICPA) has established a Private Company Council (PCC) whose responsibility is to develop a workable set of rules for private companies. The PCC has recently issued two accounting alternatives for private companies that may positively impact many CRRC members.