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FAF Rolls Out Private Reporting Plan, AICPA Disappointed

The FAF will be taking public comments on its new plan on reporting standards for privately held companies.

The Financial Accounting Foundation, which enforces accounting standards in the private sector, recently shared a plan to create a council that will draft private-sector specific standards under the Generally Accepted Accounting Principles.

FAF president and chief executive officer Teresa S. Polley said private companies' concerns and challenges often align with those experienced by publicly traded entities. "The approach outlined by the Trustees would ensure that all constituents would have the potential to benefit from improvements that reduce the complexity of accounting standards - public as well as private investors, lenders and others," she stated.

However, one group was less than pleased with the FAF's announcement. The president and CEO of the American Institute of Certified Public Accountants, Barry Melancon, and its chair, Paul Stahlin, said they were disappointed that the FAF had not proposed any plan for creating a board that would draft private company-specific standards under the GAAP.

They noted that while the Financial Accounting Standards Board has "understandably" been preoccupied with addressing issues related to publicly traded companies, private companies have long needed and called for standards that fit their needs and created a more cost-effective way to report.

The FAF will be accepting public comments on its proposal until January 14, 2012.