private-company-GAAP | Photo Courtesy of	 Baltic Development Forum	http://www.flickr.com/photos/baltic-development-forum/5381211026/sizes/q/in/photostream/Private companies may be getting a new set of GAAP if the newly established Private Company Council is successful.

The council, appointed by the Financial Accounting Foundation, was tasked with improving accounting standards for private companies, according to an article on CFO magazine’s website.

The PCC will advise the Financial Accounting Standards Board on accounting matters for private companies, particularly whether GAAP needs to be altered to better address the business needs of private firms.

This initiative would create a sense of equality for privately held companies. They have different needs from public companies and it doesn’t make sense to hold them to the same standards as the Fortune 500 firm.

This is a step in the right direction. There’s been a lot of debate about whether there needs to be two sets of standards. Generally speaking, it’s a good thing that they’re doing this. It shows that the regulators are listening to the needs of the privately-held companies.

The body was initially proposed in 2009, though the PCC is significantly different than the initial recommendations, according to the article.

The FAF will select PCC’s chairman and its nine to 12 board members as well as a review committee that will oversee the council. The council will meet five times annually and will make quarterly written reports to the FAF board.

Source: CFO Magazine, June 2012