IASB issues IFRS for SMEs

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09 Jul 2009

The IASB has issued the IFRS for SMEs. This is the first set of international accounting requirements developed specifically for small and medium-sized entities (SMEs)

IFRS for SMEs has simplifications that reflect the needs of users of SMEs' financial statements and cost-benefit considerations. Compared with full IFRSs, it is less complex in a number of ways:

  • Topics not relevant to SMEs are omitted.
  • Where full IFRSs allow accounting policy choices, the IFRS for SMEs allows only the easier option.
  • Many of the principles for recognising and measuring assets, liabilities, income and expenses in full IFRSs are simplified.
  • Significantly fewer disclosures are required.
  • And the standard has been written in clear, easily translatable language.

To further reduce the reporting burden for SMEs, revisions to the IFRS will be limited to once every three years.

It is suitable for all entities except those whose securities are publicly traded and financial institutions such as banks and insurance companies.

The 230-page standard is a result of a five-year development process with extensive consultation of SMEs worldwide. Accompanying the standard is implementation guidance consisting of illustrative financial statements and a presentation and disclosure checklist.

The IFRS for SMEs is available for any jurisdiction to adopt whether or not it has adopted the full IFRSs. It is up to each jurisdiction to determine which entities should use the standard. It is effective immediately on issue.

The standard and accompanying guidance and basis for conclusions may be downloaded immediately without charge from the IASB's website. To support the implementation of the IFRS for SMEs the IASC Foundation is developing comprehensive training material.

The Foundation is also working with international development agencies to provide instructors for regional workshops to 'train the trainers' in the use of the training material, particularly within developing and emerging economies. The training material will be published in a number of languages. The English language material will be downloadable free of charge from the IASB's website in late 2009.

Click for:

  • IASB Press Release (PDF 39k)
  • IFRS for SMEs Fact Sheet (PDF 182k). The Fact Sheet includes details of:
    • Project history
    • Outreach and consultation
    • Five types of simplifications
    • Omitted topics
    • Examples of options in full IFRSs not included in the IFRS for SMEs
    • Recognition and measurement simplifications
    • Main changes from the exposure draft

The IASB also announced that Paul Pacter, Director of Standards for SMEs for the IASB, has agreed to lead a group to support international adoption of the standard. Details of this group will be announced shortly.


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