On July 9, 2009 the IASB published the International Financial Reporting Standard for Small and Medium-size Entities (IFRS for SMEs). The IFRS for SMEs applies to all entities that do not have public accountability. An entity has public accountability if it files its financial statements with a securities commission or other regulatory organisation for the purpose of issuing any class of instrument in a public market, or if it holds assets in a fiduciary capacity for a broad group of outsiders – for example, a bank, insurance entity, pension fund, securities broker/dealer.
The definition of an SME is therefore based on the nature of an entity rather than on its size.
The IASB developed this standard in recognition of the difficulty and cost to private companies of preparing full compliant IFRS information. It also recognised that users of private entity financial statements have a different focus from those interested in publically listed companies. IFRS for SMEs attempts to meet the user’s needs while balancing the costs and benefits to preparers.
IFRS for SMEs is a stand-alone standard; it does not require preparers of private entity financial statements to cross-refer to full IFRS.
One of the big four accounting firms, PricewaterhouseCoopers (PWC) has published several materials to help familiarise accounting practices with the requirement of this standards.
There are four downloadable IFRS for SMEs publications as listed below. Just click the link to download directly from the source pages :
- Similarities and Differences : A Comparison of 'Full IFRS' and IFRS for SMEs
- IFRS for SMEs : Pocket Guide 2009
- IFRS for SMEs - Illustrative Consolidated Financial Statements 2010
- IFRS for SMEs: A Less Taxing Standard ?
Source : PwC - IFRS for SMEs