The Private Company Council (PCC) has finalized two proposed accounting standards that would provide alternatives within US Generally Accepted Accounting Principles (GAAP) for private companies. These two standards mentioned address accounting for certain interest rate swaps and accounting for goodwill subsequent to a business combination. The proposed standards have been sent to the Financial Accounting Standards Board (FASB) for endorsement as final Accounting Standards Updates.
The first proposed alternative would permit the use of a simplified hedge approach to account for certain types of interest rate swaps when converting variable-rate borrowings to fixed-rate borrowings. This would apply to private companies other than financial institutions.
The second proposed alternative would permit private companies to elect to amortize goodwill recorded as a result of a business combination over a maximum period of ten years. This proposal would also permit these companies to apply a simplified impairment test to goodwill.
In addition, the PCC has issued two exposure drafts that simplify the accounting for identifiable intangible assets in a business combination (PCC Issue No. 13-01A) and that will permit private company lessee/lessor entities under common control leasing arrangements to elect not to consolidate the two entities if consolidation accounting would otherwise be required (PCC Issue No. 13-02). The public comment period has ended for both and the PCC will meet in November to further discuss these issues.
Visit the PCC or FASB websites for the latest updates. For more information regarding this topic, contact your local UHY LLP professional.
Wednesday February 27 2019 | 4:30PM—6:30PM | Durfee Innovation Society |
2470 Collingwood St. | Detroit, MI 48206