for Small and MediumSized Entities FRF for SMEs Accounting Framework Name of presenter Audience Date Americas Main Street businesses Small and mediumsized entities pervade the business world ID: 676350
Download Presentation The PPT/PDF document "Financial Reporting Framework" is the property of its rightful owner. Permission is granted to download and print the materials on this web site for personal, non-commercial use only, and to display it on your personal computer provided you do not modify the materials and that you retain all copyright notices contained in the materials. By downloading content from our website, you accept the terms of this agreement.
Slide1
Financial Reporting Frameworkfor Small- and Medium-Sized EntitiesFRF for SMEs™ Accounting Framework
Name of presenter
Audience
DateSlide2
America’s Main Street businessesSmall- and medium-sized entities pervade the business world
and form the backbone of the US economy
They provide goods and services in a
wide-range set of activities and are active in many industry groupsNo standard definition of SME in US
2
AICPA | FRF for SMEs
MILLIONS
of small- and medium-sized entities
in the United StatesSlide3
Current SPF reporting environmentSpecial Purpose Frameworks (OCBOA): US GAAP Not Required
GAAP not required and not the best solution for many small- and medium-sized entities
IFRS for SMEs
Lack of familiarity, higher learning curve, not US-centric, form of GAAP Other Special Purpose FrameworksTax or modified cash basis may be inappropriate or insufficient for some SMEs/users
3
AICPA | FRF for SMEsSlide4
Another option…... a framework to help you deliver tailored financial reporting for America’s small business community
… a framework with streamlined, common-sense requirements based on traditional and proven accounting methods
… a framework to provide robust, meaningful financial reports to business owners, lenders, insurers and others without needless complexity
4AICPA | FRF for SMEs
?Slide5
It’s hereSlide6
An additional non-GAAP framework6AICPA | FRF for SMEsSlide7
FRF for SMEs overviewResponsive
Addresses well-documented financial reporting issues and concerns among SMEs
Cost effective
Comprehensive and relevant informationTailoredDesigned to suit financial reporting needs of SMEs and users of their financial statements7
AICPA | FRF for SMEsSlide8
Who could use it?For use when GAAP-based financial statements are not neededSmall and medium-sized entities
Owner-managed/for-profit
Can be used by any industry group
Incorporated and unincorporated8AICPA | FRF for SMEsSlide9
Who is it for?Owner-Managers Depend on reliable financial statements to - Confirm assessments of performance
- Determine what they owe/own
- Understand cash flows
Users External financial statement users who have direct access to managementNon-issuers No intent of going public9AICPA | FRF for SMEsSlide10
FeaturesStandalone framework
Concise, in plain English
Stable but nimble
Suitable criteria for general-use financial statementsBlend of traditional accounting and accrual income tax methodsFewer adjustments from book to tax10AICPA | FRF for SMEsSlide11
FeaturesHistorical cost
Framework primarily uses historical cost basis, steering away from complicated fair value measurements
Relevant
Only relevant financial reporting topics included (e.g., no comprehensive income)
Simplified
Simplified principles (e.g., no complicated derivative/hedge accounting or stock compensation rules)Targeted disclosures
Targeted disclosure requirements—what a user needs to see in financial statements11AICPA | FRF for SMEsSlide12
Key principlesConsolidation - No concept of VIEs
- Option to present parent-only financial statements
Leases
Traditional accounting and U.S. tax codeRevenue Recognition
Traditional—Earned and Realizable
Goodwill/Intangibles
Amortization/no impairment testingIncome tax accounting Option of using taxes-payable or deferred-tax method12AICPA | FRF for SMEsSlide13
BenefitsSlide14
CPAsCPAs serve as … ... a credible, knowledgeable professional who applies the most up-to-date accounting tools and practices ... a trusted business advisor with the broad perspective to provide strategic insights
The FRF for SMEs framework delivers
14
AICPA | FRF for SMEsSlide15
SME owner-managersOwner-managers need ... ... reliable and understandable financial information to inform business decisions ... ways to control costsThe FRF for SMEs framework delivers
15
AICPA | FRF for SMEsSlide16
Lending community/usersBankers, sureties and other interested parties ... need to get financial information that is relevant and clear so they can make informed decisions ... want to help customers realize cost-savings and efficiencies where possible
The FRF for SMEs framework delivers
16
AICPA | FRF for SMEsSlide17
Resources Availableaicpa.org/frf-smes
Toolkits
CPAs
Financial Statement UsersSmall Business 17AICPA | FRF for SMEsSlide18
Questions?Slide19