United States

Questions regarding the definition of a PBE


In accordance with Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) No. 2013-12, Definition of a Public Business Entity—An Addition to the Master Glossary, the FASB Accounting Standards Codification glossary was amended to include one definition of public business entity (PBE) in future use of U.S. generally accepted accounting principles. Subsequent to the issuance of this ASU, the term has been used to not only delineate between PBE and non-PBE accounting alternatives, but also to establish effective dates and to scale disclosure requirements for new ASUs.

The American Institute of Certified Public Accountants recently issued Accounting Questions and Answers Section 7100 to address questions regarding the definition of a PBE, including those related to the following matters, among others:

  • Securities included in the definition of a PBE
  • Use of the term “conduit bond obligor” in the definition of a PBE
  • Application of the definition of a PBE when entities are organized in tiered structures
  • Evaluating the definition of a PBE for financial institutions subject to the Federal Deposit Insurance Corporation Improvement Act
  • Brokers, dealers and futures commission merchants and the definition of a PBE