The Private Company Council (PCC), an advisory board to the Financial Accounting Standards Board (FASB), continues to offer “Little GAAP” modifications with two new alternatives for private company accounting: interest rate swaps and goodwill accounting.
These are two areas that affect many government contractors, especially come year-end when closing the books and preparing for a financial statement audit. The first, PCC Issue No. 13-03, is a simplified approach to interest rate swap accounting, for private companies who are in arrangements where they receive variable rates and pay fixed. It also addresses private companies whose only derivatives are similar swaps. The second, PCC Issue No. 13-01B, proposes to allow private companies to amortize goodwill related to a business combination over the useful life of the primary asset acquired, not to exceed 10 years (as opposed to only reviewing for impairment). It also provides for a more simplified impairment analysis related to that goodwill.
See http://www.fasb.org/pcc for more information on the PCC including current proposals for consideration or contact Aronson LLC’s Tom Myers at 301.231.6279.
More About PCC: The PCC determines alternatives to existing nongovernmental U.S. GAAP to address the needs of users of private company financial statements, based on criteria mutually agreed upon by the PCC and the FASB. Before being incorporated into U.S. GAAP, PCC recommendations will be subject to a FASB endorsement process. 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.