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A Guide to Ifrs for Smes

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A Guide to Ifrs for Smes
March 2012 International Accounting Standards Board

A Guide to the IFRS for SMEs

What is the IFRS for SMEs?
The International Financial Reporting Standard (IFRS) for Small and Medium-sized Entities (SMEs) is a set of high quality financial reporting principles that is tailored for the capabilities of smaller businesses and for the needs of those who use small company financial statements. A global standard for SMEs
The IFRS for SMEs is a self-contained, globally recognised, standard of 230 pages, issued in July 2009 and already widely adopted. Compared with full IFRSs, and many sets of national generally accepted accounting principles (GAAP), the IFRS for SMEs is much less complex.

Why would SMEs use it?
The IFRS for SMEs comes in response to strong international demand from both developed and emerging economies for a rigorous and common set of accounting standards for smaller companies. It can play an essential role in helping SMEs gain access to capital. This is because the IFRS for SMEs improves the quality of reporting as compared with many existing national accounting requirements. At the same time, it reduces the burden on entities in jurisdictions where full IFRSs or national requirements that have converged with IFRSs are now required. Furthermore, the IFRS for SMEs provides enhanced comparability for users of accounts both within a jurisdiction and across borders. This improves the overall confidence in the financial statements of SMEs. Clearly, it reduces significantly the costs of developing and maintaining standards on a national basis.

World-wide adoption
Organised by topic into 35 sections, the IFRS for SMEs is available for any jurisdiction to adopt, whether or not it has adopted full IFRSs. Each jurisdiction must determine which entities should use the standard. The IASB’s only restriction is that listed companies and financial institutions should not use it.

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A Guide to the IFRS for SMEs

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