FRF for SMEs and Special Purpose Frameworks (Currently Unavailable)

Author: Salvatore Collemi

Now practitioners and CPAs have great alternative options for their small privately held clients! The AICPA issued several years ago the Financial Reporting Framework (FRF) for Small and Medium-Sized Entities (SMEs) which is a simpler and more cost-effective reporting alternative to accounting principles generally accepted in the United States of America (U.S. GAAP). In this session, you will experience a practical and insightful overview of FRF for SMEs to help you apply the Framework, including the form, content and disclosures that apply to most SMEs. As a result of understanding and applying the FRF for SMEs, you may look forward to assisting your small privately-held business owners make better-informed decisions and plot the entity's future strategy with more cost-effective set of financial statements. In addition, this session will also explore the key aspects of the AICPA’s Special Purpose Frameworks (SPF) (Professional Standards AU-C 800) and provide hands-on application for preparing financial statements using an SPF. You will learn the unique measurement and disclosure requirements of various SPF options using example financial statements and illustrative disclosures. The course also includes common practice issues encountered when preparing SPF financial statements.

Publication Date: December 2018

Designed For
Accountants, practitioners, financial managers, and CPAs involved with the preparation, review, or attestation of financial statements for small to medium-sized privately-held entities.

Topics Covered

• Overview
• Advantages of using FRF for SMEs and Special Purpose Frameworks
• Transitioning from U.S. GAAP to FRF for SMEs / Special Purpose Frameworks
• Key differences between the Frameworks: Modified Cash Basis, Income Tax Basis, Regulatory Basis, and Contractual Basis
• AICPA Financial Reporting Framework for Small and Medium”Sized Entities (FRF for SMEs)
• Deciding on a Reporting Framework
• Technical Resources

Learning Objectives

• Describe the fundamentals underlying FRF for SMEs, including the components of a complete set of financial statements
• Recognize how to effectively transition to FRF for SMEs from other bases of accounting
• Review the limited authoritative and non-authoritative literature covering SPFs
• Identify how to prepare SPF financial statements using the modified cash, income tax basis of accounting, contractual basis, regulatory basis, etc.
• Recognize SPF accounting and presentation issues
• Identify the disclosure requirements for SPF financial statements
• Recognize benefits of using special purpose frameworks (SPFs)
• Differentiate correct statements about transitioning from U.S. GAAP to a special purpose framework
• Describe pure cash basis of accounting
• Recognize the definition of small- or medium-sized entity based upon the AICPA's definiton
• Identify which basis of accounting is typically used by credit unions and construction contractors
• Describe alternative financial reporting frameworks
• Identify what requires auditors to determine the acceptability of the financial reporting framework
• Recognize which two methods of accounting does the Internal Revenue Code typically allow
• Describe components of the AICPA Financial Reporting Framework for Small and Medium”Sized Entities

Level
Basic

Instructional Method
Self-Study

NASBA Field of Study
Accounting (2 hours)

Program Prerequisites
None

Advance Preparation
None