On March 15, 2025, the Private Company Council (PCC) issued its 2024 annual report – the first annual report that the council has ever released – highlighting areas of progress and accomplishments for the council. The PCC was established in 2012 to work with the Financial Accounting Standards Board (FASB) to improve the accounting standards for private companies that follow GAAP. Since inception, they have made significant progress in advising the FASB on current accounting and reporting issues that are important to private company stakeholders, as well as assisting in finalizing Accounting Standards Updates. For example, the FASB followed the PCC’s recommendation of excluding private companies from the scope of ASU No. 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, as the PCC believed it would be beneficial to learn from public company implementation and research further on this topic for private companies. Further, the PCC’s research on profits interests awards for both public and nonpublic business entities led to the issuance of ASU No. 2024-01, Compensation – Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards.
The annual report notes four key areas of progress in 2024, including credit losses for short-term trade accounts receivable and contract assets, debt modification and extinguishments, presentation of contract assets and contract liabilities for construction contractors, and lease accounting simplifications. As they look forward to 2025, the PCC aims to continue their structured process of regularly evaluating and assessing financial reporting issues that affect private companies. They plan to prioritize these issues on an annual basis to ensure that they are meeting the needs of private company stakeholders as well as identifying solutions to current and future financial reporting challenges. The PCC plans on executing its responsibility to propose changes within GAAP that result in better financial reporting outcomes for private companies. As of early 2025, the PCC has already established potential issues that have been assessed, but not prioritized, related to debt, including debt restructurings, debt modifications and extinguishments, debt disclosures, subjective acceleration clauses, and the effective interest rate method. The PCC is currently considering opportunities to make improvements in these areas.
Chess Consulting provides a full range of financial accounting advisory and support services for both private and public companies, including but not limited to audit and IPO readiness, technical accounting position papers, and preparation of financial statements and disclosures. See our Financial Accounting Support and Audit Readiness services fact sheet to learn more about how we help clients.