Private Company Council Flashcards
What does the Private Company Council (PCC) do?
Works with the FASB to set accounting standards for private companies
What is a “private company”?
Not a public company
How does the PCC define a public company?
one that is required to file or furnish financial statements with a regulatory agency related to any type of securities (debt and equity), whether those securities are traded on exchanges or over-the-counter.
What modification is allowed for private companies related to accounting for interest rate swaps?
The hedge accounting for a receive variable / pay fixed interest rate swap is simplified. The private company can assume 100% effectiveness and can use settlement value as a practical expedient for fair market value.
What modification is allowed for private companies related to accounting for goodwill?
The goodwill can be amortized over a period not to exceed 10 years.
Is a subsidiary of a consolidated public company considered a public entity?
No, only the information presented with the parent company
When should Goodwill be tested for Impairment?
When a triggering event occurs.. If a triggering event occurs, the entity applies the normal impairment testing, including pre-test.
What intangibles must a company recognize separate from Goodwill?
Other intangibles that are (1) separable or (2) contractual or legal such as copyrights, trademarks, and customerlists
What is the trade-off for setting GAAP by the PCC?
Relevance versus cost-benefit
