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State Board Report

June 2013

The Private Company Council’s proposed “Decision-Making Framework: A Guide for Evaluating Financial Accounting and Reporting for Private Companies” drew support from NASBA Chair Gaylen Hansen and President Ken Bishop in a letter sent to the Financial Accounting Standards Board on May 31, 2013. The letter praised “the open process of the PCC to expose the proposed Guide for public comment, rather than limit consideration to internal discussion. We understand the PCC will likely engage the public in further roundtable (and possibly ‘town hall’) meetings for the purpose of obtaining additional feedback from stakeholders prior to the Guide being finalized. We encourage and offer our support to undertake such endeavors…”

The letter underscored the issue of how much access investors have to management when determining what financial information is required: “When there are larger numbers of investors in a private company, their informational needs are likely to be more similar to those of public company investors. We believe the Guide should take a balanced approach to consider the level of available access to additional information.”

While being in favor of the broad direction the Guide can provide for the decision-making process, the letter also advised the PCC and the Financial Accounting Standards Board that they should not be “overly constrained by the Guide” and they “should make whatever changes in private reporting they deem necessary as their work unfolds. There are likely unforeseen issues that are yet to be contemplated at this stage of the PCC’s development.”

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