The Private Company Council (PCC) met on September 16, 2014, and “voted to finalize an alternative [to US GAAP rules] that would exempt private companies from separately recognizing and measuring non-competition agreements and customer-related intangible assets that are not capable of being sold or licensed independently in a business combination. The PCC voted to send the alternative to the FASB for endorsement. The FASB will discuss the alternative in the coming weeks.”
At the meeting, the PCC also discussed accounting for stock-based compensation for private companies and the FASB’s lease accounting improvements project.
Background on the Private Company Council: The PCC was created in May 2012 by approval of the Financial Accounting Foundation’s Board of Trustees. The PCC has two principal responsibilities:
1. The PCC and the Financial Accounting Standards Board (FASB), working jointly, will mutually agree on a set of criteria to decide whether and when alternatives within U.S. Generally Accepted Accounting Principles (GAAP) are warranted for private companies. Based on those criteria, the PCC will review and propose alternatives within U.S. GAAP to address the needs of users of private company financial statements.
2. The PCC also serves as the primary advisory body to the FASB on the appropriate treatment for private companies for items under active consideration on the FASB’s technical agenda.
Source: PCC website at www.fasb.org. Information relating to the 9/16/14 meeting is from the PCC Media Meeting Recap available on the website.