Probably the most important change to be aware of is the new FASB definition of public versus private as it’s no longer based on an entities’ legal form. Instead it’s based on different criteria, including whether the entity is required by a law or regulation to prepare and make publicly available U.S. generally accepted accounting principles (GAAP) financial statements.
In early 2012, the FASB added to its agenda a project to re-examine the definition of public. The decision was based on requests to clarify the existing definitions and address questions about which definition of a nonpublic entity was being used in various projects.
There was also a similar need for clarity on the definition of a nonpublic entity with respect to guidance issued by the Private Company Council (PCC).
On Dec. 23, 2013, the FASB issued Accounting Standards Update (ASU) No. 2013-12, generated one of the shortest standards ever issued, but its impact will be significant for those now deemed to be “public” for financial reporting purposes. Because of this revised definition, we believe many more financial institutions are considered public.
To learn more, download the 2014 Accounting and Reporting Issues for FSRV written by our friends at Crowe Horwath.
You can also contact Peter Wiese, Assurance Partner at Crowe Horwath: (916) 847-5019, peter.wiese@crowehorwath.com or via LinkedIn.
Continue to Part II.
Western Independent Bankers 