The Financial Accounting Standards Board
(FASB) will re-examine the definition of a “non-public entity” in a
new project added to its 2012 agenda.
FASB chairman Leslie Seidman said her decision
was based on comments from stakeholders requesting clarification of
the existing definitions and ongoing questions about which
definition of a ‘non-public entity’ was being used in various
projects.
The project will aim to define what
constitutes a private company to distinguish between different
types of entities for standard-setting purposes, as well as
determine which companies are to be included in the scope of the
Private Company Decision-Making Framework that is currently being
developed.
“The FASB identified an opportunity to
simplify the definition of a ‘non-public entity’ and to address a
few known practice issues” Seidman said.
“This project will also help us identify the
scope of entities that would be considered in future discussions
about potential differences in requirements for non-public
entities.”
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