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.