This year PCC members fully embraced their increased advisory role to the FASB. They became much more active within the FASB’s standard-setting process.

For example, this year PCC members fully embraced their increased advisory role to the FASB. They became much more active within the FASB’s standard-setting process.:

This greater engagement also opened the door for more private company stakeholders to provide input on a variety of FASB projects. A true snowball effect, all of this helped the FASB better address private company concerns before standards were issued, not after.

With that in mind, in this article we want to recognize some of the PCC’s important advice to the FASB on key projects in the past year:

Consolidation Targeted Improvements to Related Party Guidance for Variable Interest Entities (VIE)
The PCC supports an accounting alternative where a private company would not have to apply VIE guidance to legal entities under common control (including common control leasing arrangements).

Balance Sheet Classification of Debt
PCC members preliminarily supported the proposed guidance (with minor improvements), and would like to help the Board determine appropriate transition provisions and assist in educating stakeholders on the new requirements.

Financial Instruments—Hedge Accounting
The PCC supports overall simplification to hedge accounting and supports simplification provided under “Statement of Intent to Hedge” for private companies. 

Customer's Accounting for Implementation, Setup, and Other Upfront Costs (Implementation Costs) Incurred in a Cloud Computing Arrangement (CCA) That Is Considered a Service Contract
PCC members generally supported only the implementation costs to be capitalized, not the costs of the fees paid in a CCA considered to be a service contract.

Liabilities and Equity—Targeted Improvements
PCC members support FASB’s standard that simplifies the accounting of financial instruments with “down rounds.” The PCC’s discussions were instrumental to the FASB as it developed the proposed standard.

Nonemployee Share-Based Payment Accounting Improvements
The PCC supports FASB’s effort to simplify nonemployee share-based payment accounting by aligning the nonemployee accounting model with the employee model.

These are good examples of how the PCC’s advice helped ensure that the FASB “gets it right” when it improves private company financial reporting.

Private company stakeholders also provided valuable insights through Private Company Town Halls and submitted comments