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Steve Bartoletti

CPFA draft proposal to FASB

Posted By: Steve Bartoletti on 4/8/2020 6:09:48 PM, 0 Comments, 3903 views

Should the Current Portion of Fixed Assets (CPFA) be reported on the balance sheet? That is the question that will soon be put to the Financial Accounting Standards Board (FASB).

A draft of the proposal is now under review by representatives of FASB and the PCC (Private Company Council) which represents the interests of private companies to FASB. I expect to polish the proposal based on their feedback, then submit it formally, probably through the PCC because closely-held private companies, and their community bankers, would be the first to gain financially from the proposal. 

The 14-page draft proposal recommends reporting CPFA on the balance sheet and explains a couple of ways this could be done. It cites precedent in GAAP, explains the benefits, and addresses all concerns that I have received over the past nine years since CPFA was firsts announced in The Journal of Accountancy. It concludes with an illustration of how the two tiers of liquidity made possible by CPFA reveal insights into the complex liquidity of AT&T.  

I am not yet posting the proposal because I do not want a “draft” in general circulation. I will nevertheless make it available on a selective basis on request. 

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