By Denise Lugo
The Private Company Council (PCC), the body that advises the FASB on private company accounting matters, will hold Town Halls at AICPA conferences in April and June 2021, part of efforts to provide companies with updates of new and emerging accounting standards, according to its agenda lineup.
The PCC plans to hold a Town Hall on April 29 at the AICPA’s Group of 400 (G400) Community Meeting. The G400 is an invitation-only event that enables attendees to explore accounting best practices with leaders from top CPA firms in the country. The meeting was cancelled last year because of the coronavirus-pandemic.
A second Town Hall will be held on June 7 at the National Advanced Accounting and Auditing Technical Symposium (NAAATS) at AICPA ENGAGE. The ENGAGE conference, typically a three-day conference typically in June, as postponed to July in 2020 and held online. The conference typically features speakers on technology, tax, personal financial planning, and auditing and accounting, among other topics and panel discussions. There is a chance the meeting would continue to be held online.
PCC Town Halls meetings are set up to provide private company accountants, auditors, and other practitioners with updates about FASB accounting rules, including deep dives into the nuances of the rules.
For private companies, 2021 is a critical year because they have to gear up to adopt new lease accounting guidance under Topic 842, Leases, which take effect in 2022. Companies have to start to gearing up their systems this year to effectively implement the changes which are a big switch from prior reporting. The guidance requires companies to report the full magnitude of their long-term lease obligations on the balance sheet for the first time.
Since its 2026 issuance, the leases standard has been amended several times in narrow areas. The board recently proposed targeted revisions in relation to: sales-type leases with substantial variable lease payments, remeasurement of a lease liability, and the scope of a lease contract
The PCC also uses Town Halls to gather feedback on current private company accounting issues, as well as sector trends private companies are faced with. The information helps advise the FASB on topics that need more standard-setting work.
In 2020, for example, the PCC advised the FASB on issues related to income tax and share-based payment disclosures; revenue recognition for private company franchisors initial franchise fees; accounting for goodwill impairment-triggering events; implementation topics—revenue and leases; COVID-19 issues, according to FASB’s December 14 webinar, IN FOCUS: FASB Update for Private Companies and Not-for-Profit Organizations.
The panel is currently conducting research about the accounting for profits interest, a popular equity-type compensation offered by limited liability companies (LLCs) and partnerships. (See FASB’s Private Company Advisers Mulling Whether to Carve Out Rules on Profits Interest Compensation in the June 29, 2020, edition of Accounting & Compliance Alert.)
The PCC also plans two-day meetings with the FASB in April and June, a FASB staff person said during the webinar. The panel plans to meet April 19-20, but if held virtually would be shortened, FASB staff said. Meetings with the FASB will also be held June 21-June 22, potentially virtually as well.
Other meetings will take place September 27-28, including a possible joint meeting with AICPA’s Technical Issues Committee, at the FASB’s Norwalk, Connecticut headquarters. The panel will also hold meetings December 16-17 at the same location, including potentially a joint meeting with the FASB’s Small Business Advisory Committee.
More outreach is planned with the surety industry, though no date has been set for a meeting.
This article originally appeared in the January 4, 2021 edition of Accounting & Compliance Alert, available on Checkpoint.
Subscribe to our Checkpoint Daily Newsstand email to get all the latest tax, accounting, and audit news delivered to your inbox each weekday. It’s free!