New financial reporting options for small businesses

Description

Abstract: For those who own and run a small, privately held business, reporting financial performance usually means choosing between Generally Accepted Accounting Principles (GAAP) and special purpose frameworks, more commonly known as other comprehensive basis of accounting (OCBOA). In June, the American Institute of Certified Public Accountants introduced a new OCBOA called the “Financial Reporting Framework for Small- and Medium-Sized Entities” (FRF for SMEs). This article discusses how this differs from GAAP, and also looks at proposals made by the Private Company Council, charged with improving the process of setting accounting standards for private companies that prepare GAAP-based financial statements.