Why public companies need to know about private company GAAP

Description

Abstract: During the last year or so, FASB has issued several Accounting Standards Updates that modify Generally Accepted Accounting Principles (GAAP) for organizations that aren’t considered “public business entities” within GAAP’s definition of such a company. Although public companies need not be concerned about private company GAAP in preparing their own financial statements, the difference can have a huge impact on certain corporate activities, especially those involving potential acquisitions of private companies. This article offers some guidance for public companies, while a sidebar defines a “public business entity.”