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Contrast the role of the AICPA’s FRF for SMEs with the role of the FASB’s Private...

Contrast the role of the AICPA’s FRF for SMEs with the role of the FASB’s Private Company Council.

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Ans. The AICPA has issued its Financial Reporting Framework for Small- and Medium-Sized Entities. The FRF for SME accounting framework is designed for America's small business community. It delivers financial statements that provide useful, relevant information in a simplified, consistent, cost-effective way. The FRF for SMEs framework may be used when GAAP financial statements are not required.

Whereas, the PCC is the primary advisory body to the FASB on private company matters. The PCC uses the Private Company Decision-Making Framework to advise the FASB on the appropriate accounting treatment for private companies for items under active consideration on the FASB’s technical agenda. The PCC also advises the FASB on possible alternatives within GAAP to address the needs of users of private company financial statements. Any proposed changes to GAAP are subject to endorsement by the FASB.

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