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Department's Response to the Financial Accounting Foundation's Plan to Establish the Private Company Standards Improvement Council 

January 13, 2012

Financial Accounting Foundation
401 Merritt 7
P.O. Box 5116
Norwalk, CT 06856-5116

Re: Private Company Plan

By email

To the Board of Trustees of the Financial Accounting Foundation:

The New York State Department of Financial Services (DFS) appreciates the opportunity to respond to the Financial Accounting Foundation's Plan to Establish the Private Company Standards Improvement Council (PCSIC).  The New York State legislature created DFS by merging the New York State Banking and Insurance Departments on October 3, 2011.  We are a user of financial statements based on U.S. GAAP, and we regulate both publicly-traded and privately-held companies.

In past comment letters -- such as the November 2007 and April 2009 letters to the Securities and Exchange Commission (SEC) -- the New York State Banking Department strongly opposed bifurcation of accounting standards.  We continue to believe that a so-called big GAAP/little GAAP approach is not in the best interests of investors and other users of financial statements, since it would reduce comparability between institutions, introduce confusion, and reduce confidence in accounting and financial reporting.  We are pleased that the Financial Accounting Foundation agrees that big GAAP/little GAAP "is not a desired outcome."

While we prefer a single set of simplified accounting standards, the proposal is an acceptable compromise, especially with the planned comprehensive review of the PCSIC process after three years.  We are hopeful that PCSIC may lead to simpler accounting standards for all entities.

We have several additional points for your consideration:

If you would like to discuss our letter, please call me at (212) 709-1532 or email me at

Very truly yours,

John McEnerney
Chief of Regulatory Accounting

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