The American Institute of CPAs (AICPA) has announced its plans to formalize an optional financial reporting framework for private companies that do not need to prepare US GAAP financial statements. The AICPA does not have the authority to set US GAAP (US generally accepted accounting principles) or to require the use of any other accounting principles. But it is hoping some companies will choose to voluntarily adopt the principles that comprise its framework.
Known as the financial reporting framework for small- to medium-sized entities (FRF for SMEs), the AICPA’s framework will be geared toward owner-managers and others who are not bound by requirements to use GAAP financial statements but who still want the benefit of financial statements that conform with an “other comprehensive basis of accounting” (OCBOA) that has undergone public comment and professional scrutiny.
The AICPA’s current timeline calls for the framework to be exposed for comment in late 2012 and available for use upon its release in 2013. Based on the information released to date, our latest MHM Messenger provides you with a preview of what to expect.