The Financial Accounting Standards Board continues to sell its capability to handle accounting rules for non-public companies even as the profession mounts a bigger challenge to FASB's authority.

FASB has added another private-company-focused project to its agenda – this one to roll back disclosure requirements for assets and liabilities measured at fair value based on judgment and estimates rather than market-based data. FASB Chairman Leslie Seidman said in a statement that FASB is exploring the issue after hearing an outcry from nonpublic entity stakeholders about fair value disclosures, “particularly that many of the requirements are irrelevant to their financial statement users and are very costly to prepare.”

Earlier, FASB developed a preliminary step to the two-step goodwill impairment test to make it easier for private companies in particular to perform impairment testing. Now FASB is exploring whether the same approach can be used to test indefinite-lived intangible assets for impairment and whether financial reporting can be simplified for the sake of not-for-profit entities. FASB also is hosting a webcast Dec. 20 to bring nonpublic entities up to speed on FASB's newfound focus on considering the needs of private and not-for-profit entities when setting accounting standards.

During the webcast, the board and staff plan to review the recent proposal by the Financial Accounting Foundation to form an advisory council that will recommend accounting standards for nonpublic entities to FASB for FASB's final consideration and approval. FAF developed the plan in response to a Blue Ribbon panel report recommending a number of changes to make accounting standards more relevant for private companies. Among the recommendations, the panel called on FAF to create a separate standard-setting body with authority to make changes in Generally Accepted Accounting Principles specifically for private entities.

With more than month still remaining in the public comment period, FAF already is buried in more than 4,300 letters denouncing its proposed plan as inadequate to address the concerns of private companies. The vast majority of writers call on the foundation to go back to the Blue Ribbon report and form a separate standard setter whose decisions would not be subject to FASB's approval. The American Institute of Certified Public Accountants is calling on members to express that view to FAF, and so far more than 4,200 people have sent the AICPA's form letter or something close to it.

AICPA President Barry Melancon said in a statement FASB's focus on public company accounting issues and resistance to exceptions in the past had led to frustration on the part of private company constituents. Despite FASB's more recent efforts to infuse more private-company perspectives into its standard-setting process, the AICPA continues to press FAF for the creation of a separate standard-setting body.