F.A.S.A.B. on Proposed Accounting Reports

F.A.S.A.B. and Accounting Reports for Private Companies

By Rom Antony Day

4/30/2012

Proposed changes would only hinder the ability of decision makers to see objectively whether a business is losing money, making a profit and where. Current reporting allows you to do that. To reduce such information disclosure based on whether shareholders have access to management is flawed-business administration. To reduce the information disclosed will allow managers to disguise the truth about a business health from shareholders I think. What need to be done differently is for managers that present the information at meetings where shareholder do not have the accounting background is to simplify it and break the information down in non-technical terms. That is to say if the managers themselves know accounting, can analyze, interpret, and explain it themselves. If they are unable to, they ought to bring it an accounting person who can communicate the bottom line in non-accounting terms.

Acknowledgements

I hope that the change that has been at an impasse as of today, and its defeat comes to an end. I wrote the above article after I read the following article from CFO Magazine about changes in deliberation. It would seem that at face value increased leniency would good for private companies, and their shareholders. In reality, it will not be better for them. It would just like setting up private companies’ shareholder to a Leman and Brothers another fiasco where the ones that get hurt are the shareholders, and the company.

FASB Chair Answers Push for Private-Company GAAP by David M. Katz; May 5th, 2011.http://www3.cfo.com/article/2011/5/accounting-tax_fasb-chair-answers-push-for-private-company-gaap