Financial Accounting
A
& AUDIT international accounting
CCOUNTING
ING
Accounting for Small Businesses:
The Role of IFRS
By Nancy Christie, John Brozovsky, and Sam Hicks
F
or decades, U.S accountants in all fields have recognized a need for a simpler set of financial reporting standards for small businesses, but regulators have not been willing to provide a second set of standards. Now, for the first time, there may be an answer for small firms desiring relief from the onerous reporting requirements of GAAP. The
AICPA now recognizes the International
Accounting Standards Board’s (IASB) recently released International Financial
Reporting Standard for Small and MediumSized Entities (IFRS for SMEs), as an official set of accounting standards to be audited against. Now that separate accounting principles designed specifically for small businesses exist, how will it be received by CPAs? Will small businesses and their accountants change their methods?
sonal property, and payroll to the necessary tax authorities. The relative importance of different uses of accounting reports varies with the size of the business. The full set of financial statements is subject
Companies.” It states, “FASB and the
AICPA recognize the need to carefully evaluate whether financial reporting standards meet the needs of users of private company financial reports and whether the
to close review by government regulators, such as the SEC, and market analysts. In the United States, Generally Accepted
Accounting Principles (GAAP) are formulated by FASB and reviewed by the
SEC. Currently, FASB does not distinguish between different types of businesses. In
2006, however, FASB and the AICPA issued a joint proposal, “Enhancing the
Financial Accounting and Reporting
Standard-Setting Process for Private
changes can be implemented by private companies in a cost-effective manner.”
Private companies are not specifically defined in the proposal but are presumed
to
& AUDIT international accounting
CCOUNTING
ING
Accounting for Small Businesses:
The Role of IFRS
By Nancy Christie, John Brozovsky, and Sam Hicks
F
or decades, U.S accountants in all fields have recognized a need for a simpler set of financial reporting standards for small businesses, but regulators have not been willing to provide a second set of standards. Now, for the first time, there may be an answer for small firms desiring relief from the onerous reporting requirements of GAAP. The
AICPA now recognizes the International
Accounting Standards Board’s (IASB) recently released International Financial
Reporting Standard for Small and MediumSized Entities (IFRS for SMEs), as an official set of accounting standards to be audited against. Now that separate accounting principles designed specifically for small businesses exist, how will it be received by CPAs? Will small businesses and their accountants change their methods?
sonal property, and payroll to the necessary tax authorities. The relative importance of different uses of accounting reports varies with the size of the business. The full set of financial statements is subject
Companies.” It states, “FASB and the
AICPA recognize the need to carefully evaluate whether financial reporting standards meet the needs of users of private company financial reports and whether the
to close review by government regulators, such as the SEC, and market analysts. In the United States, Generally Accepted
Accounting Principles (GAAP) are formulated by FASB and reviewed by the
SEC. Currently, FASB does not distinguish between different types of businesses. In
2006, however, FASB and the AICPA issued a joint proposal, “Enhancing the
Financial Accounting and Reporting
Standard-Setting Process for Private
changes can be implemented by private companies in a cost-effective manner.”
Private companies are not specifically defined in the proposal but are presumed
to