The Board of Trustees of the Financial Accounting Foundation (FAF) has formed a Trustee Working Group to address accounting principles, standards, and best practices for non-public entities.
Historically, privately-held companies have not had to adhere to the same strict accounting principles as public companies, although establishing accounting principles and procedures based on the Generally Accepted Accounting Procedures is a good idea for any business.
Following standardized accounting principles makes it easier to spot errors in your books, easier for potential investors to review your financial statements, and easier for your tax accountant to file accurate tax forms for your business.
The FAF has recognized the importance of privately-held businesses and not-for-profit organizations to follow accounting principles and, when relevant, corporate best practices.
The Working Group charged with the task of establishing these principles, standards, and procedures will conduct outreach through:
- Roundtable meetings
- Surveys
- Meetings with advisory and constituent groups
In a press release published on the FAF website, John J. Brennan, FAF Chairman, said, “The FASB has an enormous responsibility in setting accounting standards for all nongovernmental entities in this country. The FAF Trustees’ initiative to review the unique needs and challenges of non-profit entities and private companies is part of our commitment to ensuring that the processes and resources are in place to meet the financial reporting needs of all providers of capital, preparers of financial statements, auditors, regulators, and others. We look forward to sharing our findings with all of the FASB’s constituents.”
