State Board Report

January 2010

NASBA has joined with the Financial Accounting Foundation and the American Institute of CPAs to form a panel addressing how US accounting standards can best meet the needs of users of private company financial statements. Rick Anderson, member of the FAF Board of Trustees and chairman of Moss Adams, LLP, has been selected to lead the “blue ribbon panel.” The other panel members are to be named this month. They will represent a cross‐section of financial reporting constituencies, including lenders, investors, owners, preparers, auditors and regulators.

The FAF had heard from the Private Company Financial Reporting Committee, as well as others, that there is a need to consider the issue of Generally Accepted Accounting Principles (GAAP) for private companies, FAF President Terri Polley said. According to the US Census Bureau, there are 29,000,000 privately‐held companies in the United States.

NASBA President David Costello stated: “On behalf of state boards of accountancy and the public which they represent and serve, NASBA is pleased to join the AICPA and FAF in a comprehensive review of the process for setting accounting standards for private companies.”

At NASBA’s 2009 Annual Meeting, AICPA Chair Robert R. Harris stated: “We continue to study possible scenarios and alternatives for private entity reporting in the future. This will become particularly relevant if the SEC ultimately mandates IFRS. And on this issue, the AICPA believes that the best approach to determining the right path is a blue ribbon commission that includes all stakeholders, including state regulators, to determine the appropriate policy position…As I have traveled the country speaking this last year, it’s the one topic all CPAs seem to understand and relate to.”

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