Defining Issues | October 2017

AICPA issues guidance about the public business entity (PBE) definition

KPMG reports on recent AICPA interpretations about applying the definition of a pubic business entity. The series of Techincal Questions and Answers includes guidance about many of the PBE criteria.


AICPA Technical Questions and Answers – Definition of a Public Business Entity (PBE)

  • All reporting entities

Relevant dates

  • Effective immediately

Key impacts

The AICPA’s Technical Questions and Answers provides interpretive guidance on many of the PBE criteria, including:

  • determining whether (a) an instrument is a security, (b) a security is traded in an over-the-counter market, and (c) a security has a contractual restriction on transfer;
  • evaluating the PBE definition at each level in a tiered organizational structure;
  • considerations unique to equity method investees and applying the equity method to private investees;
  • interpretations specific to banks and insurance companies that are subject to regulatory requirements;
  • analyzing the effects to the issuer of security resales under Rule 144 and Rule 144A.

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