By Jason Bramwell
Released by the AICPA in June, the FRF for SMEs is a new accounting option for preparing streamlined, relevant financial statements for privately held, owner-managed businesses that are not required to use US GAAP.
Available at no cost, the "Decision Tool for Adopting an Accounting Framework
" is a PDF document that features flowcharts, tables, and information on US GAAP and FRF for SMEs as well as cash/modified cash and tax basis of accounting. The tool is designed to help owners and managers of SMEs and CPAs serving those businesses make an informed decision about choosing an accounting framework.
"By following the steps and assessing the considerations and circumstances outlined in this tool, a more informed decision about the choice of an accounting framework can be made," wrote the AICPA, which added that the tool is a nonauthoritative aid and its use is not required.
Prior to issuing the decision tool, the AICPA released illustrative financial statements and disclosures, developed as aids to implementing the FRF for SMEs and to help distinguish between financial statements based on the new framework and US GAAP–prepared statements.
However, in a joint statement
released by the AICPA and the NASBA on July 15, both organizations said they are "committed to engaging in an effort to ensure that the FRF for SMEs, as a nonauthoritative framework, is not confused with GAAP and that entities that utilize GAAP or a non-GAAP solution do so in a suitable and transparent manner."