Accounting standards for private companies move forward

Description

Abstract: In theory, U.S. Generally Accepted Accounting Principles (GAAP) should apply to businesses of all sizes. But, as many owners of privately held companies know, GAAP often doesn’t make sense for their situations. However, recent initiatives by the Financial Accounting Foundation and the American Institute of Certified Public Accountants offer a structure for providing the information needed by most users of private companies’ financial reports without requiring the level of detail mandated of public companies. This article examines the proposals, while a sidebar discusses International Financial Reporting Standards for small and midsize enterprises.