IFRS for SMEs in Botswana
01 Mar 2010
A Resolution on the IFRS for SMEs adopted by the Council of the Botswana Institute of Accountants (BIA) estimates that the IFRS for SMEs will become the basis of financial reporting by more than 90% of the companies in Botswana.
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In July 2009, the International Accounting Standards Board (IASB) finally issued the long awaited IFRS for SMEs. This standard takes immediate effect. Without doubt this is a welcome development in the profession in Botswana especially in view of the fact that Botswana has legislated compliance with full IFRS through the Companies Act 2003. The SMEs standard will significantly reduce the compliance burden for companies in Botswana and it is going to be the reporting framework for more than 90% of the companies in Botswana. |
- Public companies must use full IFRSs.
- Private companies with assets greater than P5,000,000 (about US$700,000) or turnover greater than P10,000,000 (about US$1,400,000) must use full IFRSs.
- Public Interest Entities (PIE) as defined by BIA must use full IFRSs. These are:
- An entity that takes deposits or loans from the public except in circumstances incidental to its primary business.
- An entity that offers its shares or debt to the public.
- An entity that is a Parastatal or other non Government organisation that is funded by Government through a subvention or a similar form of funding arrangement.
- An entity that holds assets in a fiduciary capacity for a broad group of outsiders, such as a bank, insurance company, securities broker/dealer, pension fund, mutual
- fund or investment banking entity except in circumstances incidental to its primary business.
- An entity that is economically significant in Botswana (quantitative guidelines are provided, including greater than 100 employees).
- All other entities may apply the IFRS for SMEs except where the entities are required by legal provisions or other regulations to comply with a specific financial reporting framework other than the IFRS for SMEs.
