NASBA and AICPA Reconcile Differences on FRF for SMEs
by Terri Eyden on
The NASBA contended the AICPA created the FRF for SMEs as a special-purpose framework, or an other comprehensive basis of accounting, without appropriate due process, against an agreement made by the US Securities and Exchange Commission and the AICPA forty years ago to vest all standards-setting authority with the FASB, and without substantial support from stakeholders, including accounting regulators.
In the joint statement, the AICPA and the NASBA stated they have a shared belief that current US GAAP may not always meet the needs of small, private businesses and the users of their financial statements.
"The PCC, which was established as a result of the Blue-Ribbon Panel on Standard Setting for Private Companies created by NASBA, the AICPA, and the Financial Accounting Foundation (FAF), is currently developing an authoritative GAAP solution for private companies that we strongly support," the joint statement reads. "The PCC has made excellent progress to date, and both NASBA and the AICPA are committed to the PCC's eventual success in developing a GAAP-based financial reporting model for all private companies.
"As the PCC works to fulfill its mission to modify GAAP for private companies, the AICPA has developed the FRF for SMEs to provide private, owner-managed, Main Street businesses a non-GAAP accounting framework that is simple to apply and cost beneficial," the joint statement continues. "We believe that preparers and users of private company financial statements should responsibly assess the accounting approach to meet their current and future needs depending on individual company facts and circumstances."
In a recent Thomson Reuters survey of more than 200 accounting firms, 46 percent of CPAs say they are familiar with the FRF for SMEs. Additionally, 56 percent of respondents say they expect one or more of their clients to consider using the FRF for SMEs, 10 percent report they do not expect their clients to use the framework, and 34 percent were unsure.
- NASBA Advises Private Companies Not to Use AICPA Framework
- AICPA Unveils New Non-GAAP Framework for Financial Reporting
- NASBA Opposes AICPA's Proposed FRF for SMEs
You may like these other stories...
The Financial Accounting Standards Board (FASB) has relaunched its technical agenda web page, which Chairman Russell Golden said will inform visitors at a glance on where any given FASB project stands, the steps it took to...
Tax accounting to be simplified for money-market fundsThe US Securities and Exchange Commission (SEC) voted 3-2 on Wednesday for sweeping changes to institutional money-market funds, Emily Chasan, senior editor of...
Read more from Larry Perry here and in the Today's World of Audits archive.AU-C Section 800, Special Considerations—Audits of Financial Statements Prepared in Accordance With Special Purpose Frameworks, paragraph ....
Upcoming CPE Webinars
In this session Excel expert David Ringstrom helps beginners get up to speed in Microsoft Excel. However, even experienced Excel users will learn some new tricks, particularly when David discusses under-utilized aspects of Excel.
FRF for SMEs Series--Measurement and Disclosure Principles for various Consolidations and Business Combinations, Part 4B
This webcast will focus on accounting and disclosure policies for various types of consolidations and business combinations.
In this session we'll review best practices for how to generate interest in your firm’s services.