The first two GAAP alternatives created by the Private Company Council (PCC) were released by FASB on Thursday, giving private companies new options for possible cost savings in their financial reporting.
FASB released Accounting Standards Updates describing the alternatives.
- An alternative to amortize Goodwill over a period of 10 years or less with a trigger based and simplified impairment model.
- A simplified hedge accounting approach for certain interest-rate swaps that private companies other than financial institutions enter to economically convert variable-rate debt to fixed-rate debt. Private companies whose only derivatives are such swaps also will be relieved of certain fair value disclosures.
Each GAAP alternative has the potential to bring significant cost savings to private companies that can use them.
I recently discussed these alternatives in further detail with FASB Board Member Daryl Buck. Watch the video here: