AICPA Proposes New Accounting Rules for Small Businesses
The American Institute of Certified Public Accountants (AICPA) has proposed new accounting guidelines for "small and medium-size entities." The guidelines are intended as an alternative to the more complicated GAAP accounting rules that many large businesses are required to use. Among the ways in which the new guidelines differ from GAAP: They allow businesses to use historical cost (rather than current market value) as a basis for valuing assets and liabilities and also exclude complex rules for things like derivatives and off-balance sheet entities, which are unlikely to be of relevance to small businesses. The new framework is optional since the AICPA does not have authority to require companies to adopt it. Nevertheless, the new rules provide welcome simplification for those small and mid-size businesses that currently use GAAP accounting.
Accel | 06/11/2013