The Financial Accounting Standards Board is asking again for views on how it should develop differences in accounting standards for private companies compared with public companies.

FASB and its Private Company Council have published a second “invitation to comment” on their proposed framework for how the two groups would go about deciding when and where accounting standards should differ for private companies. “This proposed guide is intended to help the FASB and the PCC identify the unique needs of users of private company statements, while also reducing the complexity and cost of preparing those statements," said FASB Chairman Leslie Seidman in a statement. The proposed framework addresses whether and under what circumstances private companies should have different or alternative requirements related to recognition, measurement, disclosure, display, effective dates, or transition guidance when following U.S. Generally Accepted Accounting Principles.

FASB published its first invitation to comment in July 2012, then began discussing the feedback with the newly formed Private Company Council as it took shape in late 2012. The two groups agreed on some changes, including the approach to industry-specific guidance and giving private companies some latitude to select alternative approaches that make the most sense for their circumstances.

As with the original discussion paper, FASB and PCC say they believe there are six critical factors that distinguish private companies from public companies, and therefore might indicate differences would be appropriate in accounting standards. They include the types and number of financial statement users, their access to management to ask questions, investment strategies, ownership and capital structures, accounting resources, and education around new financial reporting guidance. FASB and PCC are issuing the revised discussion paper in hopes of gathering further input on the appropriateness, completeness, and cost-effectiveness of the proposed guide.

FASB's overseer, the Financial Accounting Foundation, formed the PCC under significant pressure from private company stakeholders to more seriously address the differences between public and private companies in the development of accounting standards. The council has already zeroed in on three specific areas where it wants to develop recommendations: recognizing uncertain tax positions, consolidating variable interest entities, accounting for “plain vanilla” interest rate swaps with single counterparties, and recognizing and measuring certain intangible assets acquired in business combinations.

The newly issued discussion paper proposing a decision-making framework is open for comments through June 21.

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