A blue-ribbon panel set up to examine accounting standards forprivate companies last week recommended modifying U.S. generallyaccepted accounting standards (GAAP) to meet the needs of smallerbusinesses and establishing a separate standards-setting body tooversee the changes, rather than assigning the task to theFinancial Accounting Standards Board.

The Financial Accounting Foundation, FASB's parent and one ofthe sponsors of the blue-ribbon panel, will now consider whether toenact the proposals.

“It's not a fait accompli,” says Terry Warfield, the Beyerprofessor of accounting at Wisconsin School of Business. “The FAFhas already done some things at the FASB to respond to the needs ofsome of the people who think we need a private company GAAP. Ithink we have to wait and see whether the procedures that changedat FASB recently will be effective in meeting those needs.”

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Susan Kelly

Susan Kelly is a business journalist who has written for Treasury & Risk, FierceCFO, Global Finance, Financial Week, Bridge News and The Bond Buyer.