Much ado about nothing? New financial reporting framework draws mixed reaction

Description

Abstract: Last year, the American Institute of Certified Public Accountants (AICPA) released a new type of special purpose financial reporting framework: “Financial Reporting Framework for Small- and Medium-Sized Entities” (FRF for SMEs). The organization’s intent was to ease reporting for smaller, privately held, owner-managed companies that aren’t required to follow Generally Accepted Accounting Principles (GAAP). But some observers have expressed reservations. This article explains how the new framework operates and why it’s more suitable for some organizations than for others. A sidebar notes that the AICPA has provided a decision tool for those who are uncertain whether to adopt this new framework.