We periodically comment on matters of particular relevance to users, particularly lenders, and preparers of private company financial statements. These articles are intended to provide current attention to topics that will impact the future financial reporting, and audits thereof, so that those impacted will be in a position to anticipate and prepare for change.

As we discussed in our March 2011 memorandum, the Blue Ribbon Committee in February released its recommendations to address the process for private company reporting. This was the culmination of a thorough process that included users of financial statements, especially lenders. Chief among the recommendations was the belief that a separate standard-setting board be created that would evaluate which deviations from GAAP would be appropriate. This recommendation, as well as the other suggestions, was enthusiastically supported by the AICPA and many state boards of accounting.
Read More About October 2011 Updates

During 2010 and 2011 there have been far-reaching changes proposed that address virtually all areas of financial reporting and impact substantially all issuers of financial statements. These changes impact widely-applicable accounting standards (revenue recognition, leases), form and content of financial statements, and even potential alternatives to current GAAP for private companies. Until now, the auditor's report has received little attention; but that may be changing.
Read More About Possible Changes to the Auditor's Report

On May 26, 2011 the SEC floated a trial balloon as to an approach to the potential adoption of IFRS by issuing a paper entitled "Exploring a Possible Method of Incorporation". In this document (the "Paper"), the SEC Staff in numerous places indicates that this is only one of several alternatives being considered. Yet, it is easy to see why this approach may ultimately be preferred by the SEC and is reasonably consistent with its historical and current practice. As such, this potential approach should be taken seriously by preparers and users of financial statements.
Read More About the Adoption of IFRS

The numerous proposed standards issued in draft form in 2010 were generally targeted to have a June 30, 2011 final standard issuance date. To the surprise of no one, this is not going to happen. The complexity of the proposed standards, the desire and mandate for convergance with the international rules and a few other things have all contributed to the delays. Let's explore the status of a few standards which have great application to preparers and users of private company financial statments.
Read More About 2nd Quarter Update

The Public Company Accounting Oversight Board (PCAOB) recently issued a white paper discussing its intent to look at auditor responsibilities for financial statement disclosures. Although the PCAOB has jurisdiction over only public companies, the topic has great relevance for private companies as well, and also for issuers in addition to auditors.
Read More About Footnotes

In earlier communiqu├ęs, we have discussed the ongoing progress of the Blue Ribbon Panel formed to address reporting by private companies. During 2010 the group worked to develop and gain support for the concept of an alternative to existing GAAP for private companies that would better meet the needs of users. As of February 2011, the panel's work is largely complete. In January, it delivered its recommendations (which it had been largely released informally prior to this time) to the Financial Accounting Foundation (FAF), the parent of the Financial Accounting Standards Board. The FAF will consider the recommendations and release it plans this spring.
Read More About Private Company Financial Reporting

Although the FASB has an unusually large number of proposed standards in progress, no single topic has drawn the attention of the lending community comparable to the proposed leasing standard. This is no surprise given the potential impact on balance sheets, income statements and debt covenants. So where does this topic stand?
Read More About Accounting for Leases

© Kieckhafer Schiffer & Company LLP, All Rights Reserved.