Private Company Council

Question 1

What do you need to know?

Answer 1

• Purpose of the PCC
• Definition and characteristics of public business entity
• What accounting stand

Question 2

What does the PCC do?

Answer 2

They work with FASB to identify alternative accounting for private companies is needed. PCC develops the proposed modifications and presents them to FASB .

They weight the cost benefit and the relevance.

Question 3

How do we define a private company?

Answer 3

Opposite of a public company– if you are not a public company you are a private company. Thus, you are not required to file with the SEC or other regulatory agencies.

If the SUB is private but the parent is public, the sub is still going to be treated as a private company.

Question 4

When can a private company elect to adopt a PCC alternative?

Answer 4

At any time!

Question 5

Is there retroactive application required when you adopt a PCC principle?

Answer 5

Nope!

Question 6

Standards that are modified:

Answer 6

** GOODWILL** Most likely to be tested.

Little GAAP can take amortize goodwill over 10 years or less if appropriate.

You still have to impair the goodwill

Question 7

T/F: Are private companies required to recognize intangibles that cannot be sold or licensed independent from the business.

Answer 7

No- if the intangible asset cannot be seperated from the business that was purchased, you can lump it with goodwill.