Special AICPA News Update - Nov. 1, 2012 

The AICPA today released an exposure draft of a financial reporting framework for privately owned, for-profit smaller enterprises that are not required to produce GAAP-based financial statements. This proposed new special purpose framework is designed to enable financial statement preparers of small and medium-sized private entities to produce more relevant, less complex and cost-beneficial financial statements for the companies and their financial statement users. Comments on the proposed Financial Reporting Framework for Small- and Medium-Sized Entities are due Jan. 30.

Research over the years and input from stakeholders demonstrated the marketplace need for such an accounting framework. The Financial Accounting Foundation called the AICPA’s development of an additional other comprehensive basis of accounting option for use by millions of America’s businesses “important and complementary.” FAF’s new Private Company Council is focusing on modifications to GAAP for the private company environment; the AICPA’s framework is a non-GAAP financial reporting solution.

With this project, the AICPA continues to reinforce CPAs as trusted advisors to Main Street businesses. The framework can be used by a wide variety of organizations and is applicable to many industries. Stable yet nimble, the Framework will be an ideal option for SME stakeholders who need reliable and more relevant financial statements.

Watch this video and read this FAQ for more information. In addition, members working in the private company financial reporting area should attend a free one-hour webinar (providing one CPE credit) on Nov. 16 at 11:00 a.m., ET. Space is limited; register now.

Future issues of AICPA News Update will report on resources to help you understand the proposal and tools you can use to educate private company clients, lenders and other stakeholders about the framework.