Special Purpose Frameworks

Question 1

Special Purpose Frameworks refer to:

Answer 1

Non-GAAP financial reporting frameworks designed for specific audiences, such as cash, tax, regulatory, or contractual bases of accounting, rather than the general purpose of framework.

Special Purpose Frameworks is also known as Other Comprehensive Basis of Accounting (OCBOA).

Question 2

Examples of Special Purpose Frameworks are:

Answer 2

Cash Basis - actual receipts and disbursements
Tax Basis - same basis of accounting as for tax reporting
Regulatory Basis - follows reporting requirements of a specific regulatory body
Contractual Basis - adheres to the financial reporting provisions of a contract, like a loan agreement or bond indenture.

Question 3

Cash to Accrual Basis of Accounting:

Answer 3

Differences in beginning balances results in:

Add increases in current assets

Subtract decreases in current assets

Add decreases in current liabilities

Subtract increases in current liabilities