The Private Company Council (PCC) convened on December 16-17, 2024, to discuss ongoing projects, provide feedback on proposed amendments, and assess future priorities. The two-day meeting, held alongside Financial Accounting Standards Board (FASB) members, addressed a wide range of topics relevant to private companies.
Agenda Priorities and Project Updates
The PCC reviewed progress on its four main priorities for 2024:
- Credit Losses for short-term trade accounts receivable and contract assets.
- Debt Modifications and Extinguishments guidance for term loans.
- Presentation of Contract Assets and Liabilities for construction contractors.
- Lease Accounting Simplifications and post-implementation review efforts.
The PCC also reassessed its agenda, identifying potential new focus areas, including disclosure simplifications, subjective acceleration clauses, and troubled debt restructurings.
Key Discussions and Feedback
- Credit Losses (Topic 326): The PCC discussed a proposed update for private companies and nonprofits, noting early stakeholder support. The comment period ends January 17, 2025, with project redeliberations planned soon after.
- Construction Contractors: FASB staff updated the PCC on feedback related to disclosures about retainage, emphasizing voluntary examples in the AICPA’s guidance. Next steps include continued research and example development.
- Debt Guidance: Outreach with preparers highlighted challenges with Subtopic 470-50. The PCC provided feedback on tentative decisions from the FASB’s debt exchange project.
- Lease Accounting: The PCC leases working group finalized outreach materials and began meetings with private company preparers. Additional participants are being sought for further input.
Research Projects
- Government Grants (Topic 832): The PCC supported the proposed amendments, finding them operable and disclosures appropriate. Members suggested expanding examples in the final update.
- Intangibles: User members emphasized the importance of decision-useful information about future cash flows generated by intangibles, while preparer members expressed concerns over costs. Further outreach will explore user needs.
- Financial Key Performance Indicators (KPIs): Members had mixed views on standardizing KPI definitions. Some favored optional guidance for private companies, while others questioned the project’s relevance to non-public entities.
Town Hall and Liaison Feedback
The PCC reviewed input from recent meetings with groups such as the Risk Management Association (RMA) and the Construction Financial Management Association (CFMA). Future liaison meetings are planned with the surety industry and the Institute of Management Accountants in early 2025.
Looking Ahead
The FASB thanked the PCC for advising on 12 active projects and noted efforts to stagger comment period deadlines for stakeholder input. The next PCC meeting is scheduled for March 6, 2025.
This comprehensive review reflects the PCC’s commitment to addressing private company accounting challenges and advancing practical, decision-useful guidance.