November 05, 2025
The PCC’s 2025 Priorities: Advising FASB on Private Company Issues
By Jere Shawver, PCC Chair
The views expressed in this article are Jere Shawver’s only. Official positions of the PCC and FASB on accounting matters are determined only after extensive public due process and deliberation.
I am pleased to have the opportunity to provide an overview of the progress the Private Company Council (PCC) has made in 2025 in advising the Financial Accounting Standards Board (FASB) on priority private company financial reporting issues. Before I do that, I will offer a brief background on the PCC and what drives our activities.
The PCC was established in 2012 by the Financial Accounting Foundation (FAF) to advise FASB on private company financial accounting and reporting issues. Members include private company financial statement users including sureties, banks, lessors, and other creditors; controllers, chief financial officers and other accounting-related personnel (preparers), who regularly produce financial statements; and CPAs (practitioners), who provide audit and other forms of assurance on financial statements.
The PCC advises FASB on many projects and evaluates accounting standards for private company alternatives that may not have been considered prior to implementation.
Progress on Current PCC Agenda Priorities
The PCC identifies its agenda priorities through a structured and ongoing process. That process is designed to increase the effectiveness and efficiency of the PCC by regularly assessing the most pressing issues affecting a broad spectrum of private companies. Below, I will address the key efforts that most recently arose through that process.
Completed Projects
Credit Losses
The PCC and FASB recently finalized a project addressing challenges encountered when applying the guidance in Topic 326, Financial Instruments-Credit Losses, to current accounts receivable and current contract assets arising from transactions accounted for under Topic 606.
Private company stakeholders told us that estimating expected credit losses for those balances can be costly and complex and that applying the guidance does not result in a materially different estimate of expected credit losses than if the estimate was based on historical loss information.
At its spring 2025 meeting, the PCC made final recommendations to FASB on simplifying and improving the guidance. FASB endorsed and expanded certain recommendations and issued a final Accounting Standards Update in late July 2025.
That guidance provides:
- A practical expedient for all entities related to development of reasonable and supportable forecasts that are part of estimating expected credit losses, and
- An accounting policy election for entities other than public business entities to consider collection activity after the balance sheet date when estimating expected credit losses.
Presentation and Disclosure of Retainage for Construction Contractors
Topic 606, Revenue from Contracts with Customers, includes guidance on the presentation of a contract with a customer on the balance sheet as a contract asset or a contract liability and related disclosures, but does not include specific guidance on retainage.
Surety private company financial statement users told us that information about retainage is important and that diversity in practice exists in the presentation and disclosure of retainage.
The PCC advised FASB to address this issue through a FASB Staff Educational Paper, which was released in April 2025 and is available on the FASB website. The paper, which does not change or modify Generally Accepted Accounting Principles (GAAP):
- Clarifies the presentation and disclosure requirements in current GAAP about retainage for construction contractors, and
- Provides example voluntary disclosures of retainage currently permissible under GAAP that would provide users with more detailed information about contract assets and contract liability balances.
Ongoing Projects
Leases
Some private company stakeholders have told the PCC that while the guidance on lease accounting already provides them with some relief, certain areas of the guidance continue to be costly and difficult to apply.
The PCC has a working group comprised of PCC members and members of the AICPA Private Company Practices Section Technical Issues Committee (TIC). At its summer 2025 meeting, the PCC discussed private company stakeholder feedback obtained by the working group over the past year. The working group continues to research potential lease accounting simplifications for private companies.
Debt Modifications and Extinguishments
Research is ongoing to determine whether there are opportunities to simplify the guidance on debt modifications and extinguishments for private companies and make the financial reporting information easier to understand for private company financial statement users.
Preliminary outreach with private company stakeholders has been conducted on:
- Understanding the issues encountered in applying the guidance, and
- Soliciting views on potential solutions.
Summer 2025 Meeting Update
At our Summer 2025 meeting, the PCC prioritized two additional issues for research.
Subjective acceleration clauses. At the meeting, PCC members discussed:
- The pervasiveness of subjective acceleration clauses in private company debt arrangements,
- The frequency with which lenders attempt to enforce the clauses,
- Current accounting practices,
- The complexities in applying the guidance,
- Private company user perspectives, and
- Potential solutions.
The PCC will continue to pursue this area as a current agenda priority.
Interest method and determining the effective interest rate. The PCC discussed the staff’s research, including recent outreach conducted on the challenges of applying the interest method guidance in Topic 835, Interest, and potential private company alternatives. The PCC will continue to pursue this area as a current agenda priority.
The PCC also discussed the current agenda priorities at our September 2025 meeting.
Learn More and Get Involved
The PCC places significant emphasis on engaging private company stakeholders, which is a critical element in carrying out our responsibilities. I appreciate TXCPA’s interest in the PCC’s activities and look forward to engaging with TXCPA members.
Amplifying the CPA Voice: TXCPA Committees in ActionTXCPA volunteer committees are more than observers — they’re influencers. Representing CPAs across Texas, these groups actively help shape accounting standards and tax policy by responding to proposals from key standard-setting bodies like the PCC, FASB, IRS, SEC, and more. Their mission? To ensure the CPA perspective is heard loud and clear in decisions that affect the profession nationwide. Leading the charge are two powerhouse committees:
Together, they keep Texas CPAs at the forefront of national conversations - protecting the profession and promoting fair, practical standards that serve the public and strengthen our financial system. |
About the Author: Jere Shawver serves as Chair of the Private Company Council. He has over 40 years of experience advising companies on financial reporting, accounting and business matters, across a wide range of industries, including manufacturing and distribution, construction and real estate, higher education, hospitality, government contracting, and technology. He retired in May 2025 as Chief Executive Officer of Baker Tilly US, LLP, where he was responsible for managing the assurance practice and risk management, including the Office of the General Counsel.
More information about the PCC’s work is available by visiting their webpage at www.fasb.org/pcc and in the PCC’s 2024 Annual Report. If you are interested in volunteering to be part of the PCC or on one of their working groups, please contact them at privatecompany@f-a-f.org.
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