The AICPA developed a non-GAAP compliant tool, Financial Reporting Framework for Small- and Medium-Sized Entities (FRF for SMEs) for use by private, owner-managed businesses when GAAP financial statements are not required. The tool provides considerations to help decide whether GAAP, the FRF for SMEs, cash/modified cash basis, or tax basis is the most suitable accounting framework. Organizations also are advised to consult with their CPA firm and external stakeholders, where appropriate.

Meanwhile, the US Financial Accounting Standards Board (FASB) and the Private Company Council (PCC) are working on potential alternatives for private companies within GAAP. Four narrowly scoped alternatives for private companies have been proposed by FASB and are under consideration by the PCC and FASB.

Click for:

• AICPA's FRF for SMEs decision tool (link to AICPA website)
• FASB and PCC Private Company Decision-Making Framework project (link to FASB website)