Groundhog Day for Standards

One of my favorite movies from several years ago is Groundhog Day with Bill Murray. Usually, I like anything with Bill Murray because he is funny and a very talented physical and verbal comedian/actor. But in this case, it is also the story line of the movie that helps make it quite humorous. In it, Murray’s character, an obnoxious TV weatherman from Pittsburgh, PA, relives the same exact day over and over again in the town of Punxsutawney, PA, covering the Groundhog Day festivities that take place there. And I don’t mean sort of the same day; I mean exactly the same day, over and over. As a result, he begins to reexamine his life as a jerk and tries to become a better person. The movie finally has a happy ending where he ends up changing for the better and getting the girl, and his life returns to normal – meaning each day is not the same.

I thought of Groundhog Day when I read the recent report about the “Blue Ribbon Panel on Private Company Financial Reporting” holding its first meeting. The idea of a different set of standards for private/non-public companies has been around a very long time. Somewhat like Groundhog Day, we keep talking about the issue and having the same conversations over and over – but nothing ever changes. Maybe this time it will turn out differently – at least I hope so.

When I was first introduced to the idea of different standards for private companies over 30 years ago, the descriptive moniker was “Big GAAP/Little GAAP.” Many in the profession felt that GAAP made sense for larger public companies, but didn’t really fit with the world of smaller/private businesses. Instead, a different set of standards – “Little GAAP” – would be more meaningful for them. While this would seem to make intuitive sense, the profession has never been able to get over the hump and implement something on this front. That is perhaps until now.

This new Blue Ribbon Panel, which is sponsored by AICPA, the Financial Accounting Foundation (FASB’s parent organization) and the National Association of State Boards of Accountancy (NASBA), may be the last, best hope for actual change in this area. The Panel has 18 members from a cross-section of reporting constituencies, including lenders, investors and owners, as well as auditors and regulators. Billy Atkinson, with PWC in Houston, is a member of the panel as the current Chairman of NASBA.

Their focus will be on the users of financial statements for private companies and coming up with the right set of standards to best serve their needs. They do not plan to get into re-writing specific standards, but instead will examine the process for standards development and try to come up with the best overall solution. They hope to complete their work and issue recommendations later this year or early in 2011. It sounds like they are on the right track, and hopefully their approach will get us to a different ending for this long-playing movie. Otherwise, in the words of Yogi Berra – “Its Déjà vu all over again!”

(By the way, if you’d like to read more on this topic, please see the Accounting and Auditing column in your upcoming May/June Today’s CPA magazine.)

Socialize This Post

SOCIALIZE IT →

Tweet

SHARE IT →