Spotlight on CPAs By Anne McDonald Davis, ABC
Wise Council
Texas CPA to Chair New Regulatory Group for Private Companies nervous, so we talked about it and decided, ‘OK, go ahead and nominate me, but I won’t commit until I know exactly what’s involved and whether I’m really a candidate.” In the end, he relented and agreed to serve. He jokes that one factor is the Astros don’t have a very good team right now. On a more serious note, he emphasizes: “I credit a lot to my roots with the Texas Society of CPAs. These friends came to me initially and asked me to do this, and it’s because of them that I’m doing it.” So for the present, fishing, golf and retirement will have to compete with yet another service mission for Atkinson’s profession.
PRIVATE COMPANY ANGST Billy Atkinson, CPA-Houston, had certainly earned his retirement. Aside from a distinguished 39-year career at PricewaterhouseCoopers, LLP, Atkinson had served as chairman of the National Association of State Boards of Accountancy (NASBA) from 2009 to 2010 and as the presiding officer of the Texas State Board of Public Accountancy (TSBPA) from 2003 to 2005. Time to hang up his CPA hat, walk the dog and play golf at home in Sugar Land, and head out to the family fishing cabin in Port O’Connor. But wait. The Financial Accounting Foundation (FAF) had issued a call for nominations to chair the recently created Private Company Council (PCC), and a number of Texas CPAs in-the-know felt strongly that Atkinson was their man. “The Texas Society contacted me and asked if they could nominate me,” recalls Atkinson. “I said, ‘I don’t need to do this. Someone else should do it.’ So I referred them to others.” Then leadership at TSBPA also asked … and then NASBA. Atkinson chuckles, “By that time, my wife started questioning what this all meant and even my dog was getting
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Back in 2009, the American Institute of CPAs (AICPA), FAF and NASBA established a blue-ribbon panel to address how U.S. accounting standards could best meet the needs of users of private company financial statements. As NASBA chairman, Atkinson was a sponsoring member of that panel. Contrary to Atkinson’s expressed viewpoint, the majority of the panel strongly recommended the creation of an independent standard-setting board, separate from the Financial Accounting Standards Board (FASB), rather than having any proposed changes to existing U.S. Generally Accepted Accounting Principles (GAAP) subject to ratification by FASB. The decision of the FAF Trustees was that FASB will “endorse” changes submitted by the PCC and the PCC would thus follow the process of accounting standards development as used by FASB. Little did Atkinson realize that he would be the first chair of the new entity. At the inaugural meeting of the PCC on Dec. 6, 2012, Atkinson says they were focused on the issues that cause the most angst among private company “stakeholders.” (Atkinson uses the latter as a generic term for users, preparers, and their accountants or auditors who deal with the application of the
standards to their transactions.) Those areas included consolidation of variable interest entities, accounting for “plain vanilla” interest rate swaps, accounting for uncertain tax positions, and recognizing and measuring, at fair value, various intangible assets (other than goodwill) acquired in business combinations. “These issues are among a fairly short list most often mentioned, issues that generate a lot of ‘angst,’ as I said, and a lot of concern. I refer to this as the ‘low-hanging fruit,’ because it’s the most obvious,” Atkinson explains. At the next meeting, which was held on Feb. 12, 2013, the PCC formally added these items to its agenda, with the exception of accounting for uncertain tax positions.
UNCERTAIN TAX POSITIONS The new chair clarifies: “What we tend to refer to as FIN 48, we looked at it carefully and we could see no current relevance or excess cost vs. benefit issues for private companies, other than the difficulties that they had in initial implementation. Private companies ultimately have to acknowledge their uncertain tax positions in various states, federal or foreign jurisdictions … and deal with the likelihood of liability once those facts are fully known to the taxing authorities and others. And so FIN 48 requires companies to really have to do some work, and it’s hard. Other than that, we couldn’t find, at least not currently, any justification for moving forward with such a project.” So the PCC has tabled the issue while they seek additional input from private company stakeholders. Atkinson assures there’s “still an open book on that one.”
INTANGIBLE ASSETS ACQUIRED IN BUSINESS COMBINATIONS As the PCC began to address the issue of recognizing and measuring, at fair value, various intangible assets (other
Today’sCPA
| MAY/JUNE 2013