New Alternative to GAAP for Private Companies – June 20, 2013 by Pat Piteo

As reported at our annual client CPE half-day seminar late last week, the American Institute of Certified Public Accountants (AICPA) has issued its Financial Reporting Framework for Small and Medium-sized Entities (FRF for SMEs). The framework, which is now available for use for those interested, offers private companies a more relevant and simplified way to prepare and deliver financial statements.

The FRF for SMEs provides private companies with an alternative to generally accepted accounting principles (GAAP), in situations where GAAP reporting is not required by a bank or other party-users of the financial information. GAAP often outlines requirements better suited for public companies but can be overly burdensome or ineffective for private company reporting. The FRF for SMEs is intended to be more cost-effective and will provide a more useful picture of the organization’s financial situation.

Pat Piteo, a partner and co-technical director of Cohen & Company, was a member of the committee that developed FRF for SMEs. Pat has long been involved in the crusade to help provide private businesses with options for reporting their financial information in a way that is fair and beneficial to all parties involved. She was part of the AICPA Task Force to Study Financial Reporting for Private Companies and is a member of the Financial Accounting Standards Board (FASB) Small Business Advisory Committee.

Before looking to adopt the new framework, you will need to have in-depth discussions with your bankers and accountants. To learn more, view Pat’s extensive presentation on the new FRF for SMEs or contact her at 330.480.4624 or ppiteo@cohencpa.com to discuss your company’s opportunities to simplify your reporting requirements.

 

This communication is for information only, and any action should only be taken after a detailed review of the specific situation and appropriate consultation.

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