Attestation Update – A&A for CPAs

Technical stuff for CPAs providing attestation services

Some clues to interpret behind-the-scenes fight over Little GAAP

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Don’t know about you, but I’m not perceptive enough at reading the back room maneuvering to figure out what is going in the battle for turf between the AICPA and FASB over Little GAAP and Big GAAP.

I’m smart enough to know there is a fight.  See my post here for discussion of AICPA announcing they will set up a new standard-setting body if FAF goes forward with its plan to keep PCSIC (Pic-sic?) under the control of FASB.

In his post Little GAAP – Big GAAP Territorial Fight, John Hufnagle suggests that a few of the FASB’s recent projects are designed to make GAAP more user-friendly for private companies.  Here are three illustrations:

  • ASU 2011-18, which makes it easier for companies to avoid the time and cost of determining fair value for goodwill every year if it is more likely than not that there’s no impairment. Mr. Hufnagle describes this as “step 0”. 
  • A project to consider adding a “step 0” to determine impairment of indefinite-life intangibles.
  • A project to consider exempting nonpublic entities from some of the Level III fair value disclosures.

He closes with linking the Little GAAP fight with the IFRS issue:

Funny how the FASB’s sudden realization that US GAAP might be an unnecessary burden on private companies has intensified as the convergence project with the IASB is getting closer to possibly making the FASB irrelevant.

Check out the full article – I found it helpful for reading between the lines on the turf battles.

Written by Jim Ulvog

December 4, 2011, 6:08 am at 6:08 am

Posted in Accounting

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