Wednesday is the deadline for comments on the AICPA’s proposed Financial Reporting Framework for Small- and Medium-Sized Entities (SMEs).
The proposed framework was designed to provide streamlined financial reporting options that meet users’ needs without being unnecessarily complicated or costly for SMEs that are not required to file U.S. GAAP financial statements.
- Characteristics of the proposal include:
- An emphasis on the use of historical cost rather than fair value, which would limit the need for appraisals and valuations.
- Reporting of costs when they are incurred and revenue when performance is achieved and reasonable assurance exists regarding measurement and collectibility.
- No requirement for consolidation of variable-interest entities (VIEs) into SMEs’ financial statements.
- Traditional accounting for leases that is closely aligned with how leases are treated for income tax purposes.
- Practical, simple goodwill accounting.
Comments should be addressed to Robert Durak at firstname.lastname@example.org. The AICPA will review the comment letters received and plans to issue the final framework this spring.
—Ken Tysiac (email@example.com) is a JofA senior editor.