The Financial Accounting Standards Board (FASB) and the Private Company Council (PCC) issued the final Private Company Decision-Making Framework: A Guide for Evaluating Financial Accounting and Reporting for Private Companies.

The FASB also issued FASB Accounting Standards Update No. 2013-12, Definition of a Public Business Entity: An Addition to the Master Glossary.

Known informally as the Guide, the Private Company Decision-Making Framework is intended to assist the FASB and the PCC in determining whether and when to provide alternative recognition, measurement, disclosure, display, effective date or transition guidance for private companies reporting under U.S. generally accepted accounting principles (GAAP).

The Definition of a Public Business Entity will be used by the FASB, the PCC and the Emerging Issues Task Force (EITF) to determine the scope of new accounting and reporting guidance and to identify the types of companies that are excluded from the scope of the Guide.

“The Guide and the Definition of a Public Business Entity are integral parts of the FASB and the PCC.s ongoing commitment to better serve the needs of both users and preparers of private company financial statements,” said FASB chairman Russell G. Golden. “The Guide will help the FASB and the PCC identify opportunities for private companies to reduce the complexity and costs of preparing financial statements in accordance with U.S. GAAP. Defining a public business entity will help clarify the Guide’s scope, while also addressing stakeholder concerns with the inconsistency and complexity of having multiple definitions of nonpublic entity and public entity within GAAP.”

PCC chairman Billy M. Atkinson said: “The Guide is intended to assist the PCC in identifying alternatives to U.S. GAAP based on the needs of users and preparers of private company financial statements. It should ensure that the quality of reported information remains high for the benefit of all private company stakeholders and our capital markets.”

To read the entire Private Company Decision-Making Framework click here.