From October 2011, when the
FAF released a proposal to establish the PCC, until today, over six years
later, a lot of changes have occurred. By researching the Private Company
Council on the FASB website, the first thing I discovered is that the PCC was
approved on May 23, 2012, with the final plan was issued on May 30, 2012. Whereas
the FAF initially wanted to appoint an FASB member as the chairperson of the
PCC, the Final Report states that the FAF eliminated this requirement and
instead required the Chair to be independent of the FASB. The PCC can also set
its own agenda without the approval of the FASB as well as hold educational and
administrative sessions without the presence of any FASB members. This shows
that the FAF was successfully willing to work towards accommodating the needs
of the PCC by providing them more independence as well as allowing PCC members
to have a voice without a feeling of pressure from the FASB. In response to the
above, the report states, “The Trustees believe that these steps, taken
together, provide the PCC with adequate autonomy and would avoid the creation
of a ‘two-GAAP’ system that could create confusion, increase costs, and
potentially lower the quality of accounting standards” (“Establishment of the
Private Company Council”).

            In February 2015, the FAF Trustees conducted a review of
the PCC based upon its first three years of operations to ensure that the PCC
is effectively meeting its main objectives. The conclusion that the Trustees reached
was that the PCC has been very successful, especially towards reducing costs as
well as addressing complexity for financial statement preparers. The PCC’s
success is highly due to their importance towards seeking input from private
company stakeholders to better improve the private sector of accounting.

Throughout the years, the PCC has continually held Town Hall meetings in
various states throughout the United States in order to ensure that the voices
of such stakeholders are heard and brought forward. Because of this, the PCC
has also become involved in various other projects. Their most current meeting
from December 8, 2017 was in regards to the FASB’s project on cloud computing
and the effect that capitalizing fees would have on cloud computing, as well as
a discussion on their research whether certain expenses should be disaggregated
on private company financial statements. The next PCC meeting will be held on
April 20, 2018.

            To conclude, I believe that the private company sector
has gained a greater voice through the establishment of the Private Company
Council (PCC). Throughout the years, it has been clear that public companies
have taken the greater spotlight, with private companies being in the
background. However, I believe that the PCC is looking out for the greater good
of the private company constituents, providing them with an active role in the
process of standard-setting. The article was very interesting in that it
detailed the different opinions of company officials. Although many believed
that the PCC would not have much autonomy if under the control of the FASB, I
believe that the past couple of years have proven otherwise. The PCC and the
FASB have been able to successfully work together on various projects and
address private company matters. Therefore, through the continuation of
meetings and an active role in listening to public opinions, the PCC will
continue to improve private company standards.