I have generally considered the developments regarding accounting standards for private companies over the past couple of years to be distractions from my focus on public company financial reporting. But it has come to the point where I have to write something about the AICPA’s recently released Financial Reporting Framework (FRF) — for two reasons.
Reason #1 is that I strongly support simplifying accounting standards; but not as in the FRF, by permitting a company to pick and choose freely from a smorgasbord of options. The far better way is to measure all assets and liabilities at current value; for the simpler business structures of SMEs, barriers to implementation should not be high.
Reason #2 is that however I regard the effectiveness and independence of the FASB, past history tells us that no investor should want the AICPA to play accounting standards setter ever again. That, I believe is the [Read More...]