Generally Accepted Accounting Principles in the U.S. ("US GAAP") have evolved over time and there are some important areas currently under consideration. Middle market companies should keep an eye on these topics, including Revenue Recognition and Leasing and to a lesser extent Financial Instruments and Insurance Contracts. While changes may appear daunting, the Financial Accounting Standards Board (FASB), through the Private Company Council, will bear in mind whether and when alternative accounting or reporting may be necessary for qualifying private companies. In fact, two recent amendments have been issued to permit alternative accounting/reporting for qualifying private companies.
But you may be asking yourself, "To what extent are changes being contemplated? How can they my business?"
The National Center for the Middle Market (NCMM) is here to help. On March 19, the NCMM will gather experts for a webinar on US GAAP to provide an overview of the coming changes, highlight potential impacts from your business perspective, and answer pending questions. For all of the highlights click here.
You should keep an eye on these debates and the changing standards as they're issued. You may need systems to capture, classify, and record transactions to comply with any changes. It's certainly a lot of work and cost, but noncompliance is much costlier. Consulting with your accounting professionals is highly recommended as the changes roll out and impact your middle market business.
For a broader prospective on changes, click here to refer to the FASB project agenda.
Boston-based Chuck Leddy is an NCMM contributor and a freelance reporter who contributes regularly to The Boston Globe and Harvard Gazette. He also trains Fortune 500 executives in business-communication skills as an instructor for EF Education.