DescriptionStandards overload has been a long-running problem for smaller Show
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CPE Field of StudyLocationEvent Information WhenJun 9,
2014 LocationLoyola Graduate Center 2034 Greenspring Dr Register for this EventAICPA’S Financial Reporting Framework for Small-to Medium-Sized Entities: What You Need to Know Right Now (170020-14)The AICPA just released a new financial reporting framework for small businesses. It aims to save small business owners both time and money. According to aicpa.org, the FRF for SMEs (Financial Reporting Framework for Small to Medium Sized Entities) is “a new accounting option for preparing streamlined, relevant financial statements for privately held owner-managed businesses that are not required to use GAAP. The FRF for SMEs framework draws upon a blend of traditional methods of accounting with some accrual income tax methods.” Examples of how the new framework reduces the complexity and cost of financial reporting for small businesses include the following:
Definition of SMESo what is the definition of a SME? A standard definition doesn’t exist in the United States. According to the AICPA, “the term is intuitive, widely recognized, and effectively descriptive of the scope of entities for which the FRF for SMEs accounting framework is intended.” FRF for SMEs Accounting FrameworkThe task force and staff deliberately did not develop quantified size criteria for determining what is a small-and medium-sized entity. They decided that developing quantified size tests is not feasible. It is also not an effective way of describing the kinds of entities the framework is intended for. Rather, the AICPA has developed a list of characteristics of SMEs to guide companies in determining whether to adopt the new framework. Excerpt of FRF for SMEs ReportHere is the list excerpted from the FRF for SMEs report:
ConclusionSince the use of the framework is optional, there is no effective date. So, businesses can use the framework immediately. [box]Strategic CFO Lab Member Extra Access your Strategic Pricing Model Execution Plan in SCFO Lab. The step-by-step plan to set your prices to maximize profits. Click here to access your Execution Plan. Not a Lab Member? Click here to learn more about SCFO Labs[/box] What is the financial reporting framework for small and mediumThe FRF for SMEs™ accounting framework is designed for America's small business community. It delivers financial statements that provide useful, relevant information in a simplified, consistent, cost-effective way. The FRF for SMEs™ framework may be used when GAAP financial statements are not required.
What is the effective date for Ssars No 24?39 of AR-C Section 90, SSARS No. 24 will take effect for compilations and reviews of financial statements for periods ending on or after June 15, 2019.
Why is the financial reporting framework for small and mediumWhy would small- and medium-sized entities use the FRF for SMEs framework? The FRF for SMEs framework provides efficient, meaningful financial statements without needless complexity or cost for those SMEs that are not required to issue GAAP-based reports.
What is a small and mediumSmall and medium-sized entities are entities that: (a) do not have public accountability, and. (b) publish general purpose financial statements for external users. Examples of external users include owners who are not involved in managing the business, existing and potential creditors, and credit rating agencies.
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