The AICPA's Financial Reporting Framework for Small and Medium-Sized Entities

Examining Its Key Features

Joseph C. Sanders, PhD, CPA, and Deborah L. Lindberg, DBA, CPA, and Deborah L. Seifert, PhD, CPA

The IASB has developed IFRS for Small and Medium-Sized Entities (SME), the benefits of which are discussed in the authors' article, “Is IFRS for SMEs a Beneficial Alternative for Private Companies? The IASB's Comprehensive Review” (The CPA Journal, February 2013). The United States has been slow to adopt IFRS for SMEs. Although the AICPA urged the Financial Accounting Foundation (FAF) to establish a separate board that could create modifications or exceptions to GAAP to benefit SMEs, the FAF declined. The AICPA responded by developing a new other comprehensive basis of accounting (OCBOA) for SMEs: the Financial Reporting Framework for Small- and Medium-Sized Entities (FRF for SMEs).