Financial Reporting Framework for Small and Medium-Sized Entities (FRF for SME)
Our checks and balances advisory service is for the business owner that is ready to get out of the accounting trenches. Reporting accurate and timely information is critical to the success of your company, and the best way to ensure that it happens is with proper internal control procedures. We are your solution to ensure that appropriate internal controls are effective and procedures are completed in a timely manner. Our experience with internal controls allows us to identify issues and make recommendations to ensure that your company has appropriate internal control procedures implemented.
At KROST, every member of our project team is required to maintain a minimum number of continuing professional education (CPE) hours to ensure that we are up to date on the latest information that impacts you. Further, every assurance and advisory member of the management team is a licensed CPA. Each engagement is reviewed in detail by the principal and a member of KROST's technical management team. We do this because we believe in high quality.
The FRF for SME is for the creative cost saver. You've selected this attestation report because you understand the complexity of GAAP and IFRS, as well as the ever-expanding covenant and investor financial reporting requirements. This attestation report was designed to reduce that burden.
For privately held businesses that do not require the use of GAAP, the American Institute of Certified Public Accountants (AICPA) created the FRF for SME to alleviate the administrative burden of accounting in accordance with GAAP. Several examples include reporting revenue recognition and leases prior to the adoption of the latest standards and using historical cost for financial items that would normally require fair value (no more 409a valuations or appraisals that cost you more money).
Frequently Asked Question
Will lenders and investors accept financial statements prepared under the FRF for SMEs framework?
Business owners and their CPA practitioner (KROST will do this on our client's behalf) should consult with lenders and investors about the use of the FRF for SMEs framework. Our experience is that lenders accept financial statements using this framework because of the substantial relevance and cost-benefit factors. As accounting standards become more complex, costly, and time-consuming to implement in accordance with GAAP, the FRF for SME will help businesses maintain consistent traditional accounting principles and accrual income tax accounting methods that are familiar to both lenders and investors. The FRF for SME is a reliable accounting framework that provides relevant financial information that is simplified and contains comprehensive accounting principles that have been subjected to professional scrutiny. The best part about FRF for SME is that it was designed to be a cost-saving financial reporting option.
Explore your options, and in the proposal request, mention that you want FRF for SME.