What Is It?
The FRF for SMEsTM framework 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 Main Street America and their financial statement users.
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 a reporting option for owner managed, for-profit businesses "important and complementary" to its own efforts to modify GAAP for private companies.
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.