Financial Reporting Framework for SMEs

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Financial Reporting Framework for SMEs

The AICPA's financial reporting framework for small- and medium-sized entities (FRF for SMEs) is designed for privately owned, for-profit smaller enterprises that are not required to produce financial statements in accordance with U.S. GAAP. An exposure draft of this proposed financial reporting option was released on Nov. 1, 2012, to obtain input from stakeholders. The comment period has closed and letters received are available to the public. The AICPA expects to issue the final framework in late spring 2013.

Exposure Draft and Comment Letters

The exposure draft provides a description of the proposed non-GAAP financial reporting framework and a discussion of the circumstances leading to its release. The AICPA sought comments from stakeholders Nov. 1, 2012, through Jan. 30, 2013, and is now considering the input received.

Written comments on the exposure draft are part of the public record of the AICPA and are available for public inspection at the offices of the AICPA until Jan. 31, 2014. The comment letters also are available for review online.

Download the exposure draft (.pdf, 1.41MB).

Background

What Is It?

The FRF for SMEs draws upon a blend of traditional methods of accounting with some accrual income tax methods. It consists of simplified principles and focuses on the most relevant information needs of SMEs and their financial statement users. The framework is applicable to many industries. Stable yet nimble, the framework will be adapted to accommodate significant developments in financial reporting.

Why Was It Done?

Research over the years and input from stakeholders demonstrated the marketplace need for such an accounting framework. The Financial Accounting Foundation, which oversees the Financial Accounting Standards Board, called the development of this framework "important and complementary."

Who Developed It?

A working group of CPA professionals and AICPA staff who have years of experience serving smaller-to-medium-sized private entities crafted the framework.

FAQ and Additional Information

Have questions about the framework?

Download the Frequently Asked Questions document. The FAQ provides answers to commonly asked questions about the framework.

The FRF for SMEs is a non-GAAP financial reporting solution that will be an option for millions of America's private companies. To find out about efforts to modify GAAP for private companies, visit the AICPA's Private Company Financial Reporting page.

Toolkit for FRF-SMEs

These AICPA resources will help members and others educate accounting firm clients, private companies, bankers, insurers and additional stakeholders in the private company financial reporting environment about the proposed Financial Reporting Framework for Small- and Medium-Sized Entities. You may find these materials useful for your staff as well.

Printable Flyer - Describes the key features of the FRF for SMEs exposure draft
Article - Provides information on the proposal and may be included in client newsletters or on your website, or provided to users of private company financial statements

Bob Durak, Director-Private Company Financial Reporting

FRF for SMEs Exposure Draft

Bob Durak, Director, Private Company Financial Reporting, discusses the Financial Reporting Framework for Small- and Medium-Sized Entities.

Learn about FRF-SMEs

The AICPA will offer a wide array of training and development opportunities surrounding the new framework. Currently, the following resources are available:

Press Releases

AICPA, November 1, 2012

News Resources

Podcast (JofA, 3/2013)
A Quest for Relevance: New Framework for SMEs Balances Costs and Benefits (JofA)
AICPA Proposes Financial Reporting Framework for SMEs (JofA)
Small, Private Firms Getting Their Own Accounting Standards (CFO.com)
AICPA Releases OCBOA Draft (Accounting Today)
AICPA FRF for SMEs Exposure Draft Available for Comment (AccountingWEB)
Framework for SMEs Emphasizes Relevance, Historical Cost (JofA)

Blog Post

New Reporting Framework Will Eliminate “Noise” for Bankers, Other Financial Statement Users (AICPA Insights)

CPE Webcast - archive

AICPA's Financial Reporting Framework for Small- and Medium-Sized Entities (FRF for SMEs) - no CPE credit.
- Features DeAnn Hill, FRF for SMEs Task Force; Chuck Landes, Vice President Professional Standards and Services; and Bob Durak, Director, Private Company Financial Reporting

Share your thoughts

Join colleagues in a discussion on the proposal through the AICPA's LinkedIn group (for AICPA members only)

Contact Information

Additional Information

For more information or to contact the AICPA regarding the FRF for SMEs project, please email Robert Durak, Director, Private Company Financial Reporting.