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Gaap Standards

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Submitted By autumnjessica
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Introduction Reporting standards for public and privately held companies, presently up for debate as specific standards of disclosure for each type of business differ. Even though the understanding of full disclosure requirements for the user required by publically held companies, the question of full disclosure for privately held companies still lingers. When it comes to financial reporting and the regulations that govern the reports, all companies should report in the same manner, including total disclosure. This paper will focus on one set of GAAP standards utilized for all companies regardless of whether they are public or private. Throughout this paper, we will explore the aspects of why it would be cost effective for all organizations to report with one GAAP standard, consistency in reporting, and the importance of less confusion (relevance versus reliable) by utilizing one set of standard for both public and private companies, rather than the creation of separate standards.
Cost Effectiveness The adoption of one GAAP set of standards for public and private companies still remains supported by several accounting groups. A modification created by the GAAP for private companies, this could lead to changes in the disclosure, presentation, and recognition standards. According to California CPA Education Foundation, “Cost has been one of the main issues for proponents of modifying the standards for private companies.” The panel has discovered that it is very difficult to put a monetary value on the penalties of leaving out certain information in the financial statements. There have been recommendations for the private company accounting standard setting board to decide if there should be modifications or exceptions if necessary. The framework would then provide information on the appropriateness of the differences (CalCPA, Pg. 2). Harry Drew stated

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