Nonpublic Entity Definition May Change
The FASB is adding to its agenda a project to re-examine the definition of a “nonpublic entity”. This project will focus on defining what constitutes a private company in order to distinguish between different types of entities for standard setting purposes. This project was requested by various companies, creditors and other interest groups in order to provide clearer guidance on which companies should fall under the Private Company Decision-Making framework under the FASB. This decision making framework was the result of the FASB attempting to make financial reporting for companies considered “nonpublic entities” easier.
The FASB will begin performing research and expects Board deliberations on this project relatively soon.