FRF for SMEs Frequently Asked Questions



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What is the FRF for SMEs accounting framework? 

All financial statements are prepared in accordance with a financial reporting framework. The term financial reporting framework is defined as a set of criteria used to determine measurement, recognition, presentation, and disclosure of all material items appearing in the financial statements. Examples of financial reporting frameworks are generally accepted accounting principles (GAAP) in the United States of America, International Financial Reporting Standards (IFRSs), and special purpose frameworks (also known as other comprehensive bases of accounting [OCBOA]).The FRF for SMEs framework 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. The framework was developed by a working group of CPA professionals and AICPA staff who have years of experience serving small businesses. The FRF for SMEs accounting framework was released by the AICPA in June 2013.