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An Executive Guide to IFRS: Content, Costs and Benefits to Business by Peter Walton

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CHAPTER 7

THE IFRS FOR SMES

This chapter completes the review of IFRS as such and addresses the separate standard that is intended to meet the needs of small and medium-sized businesses. The chapter explains the origins of the project and analyses the content of the standard as well as drawing attention to the small number of areas where its requirements differ from those of IFRS for listed companies.

This ground-breaking standard was issued in 2009 and sits apart from the body of IFRS. It provides a stand-alone comprehensive basis of accounting for small and medium-sized businesses and has been adopted in many countries for companies in a size tier below that in which IFRS are used. Essentially the standard has been created from all the other IFRS. It has been made much shorter partly by eliminating rules for transactions it was thought an SME would be unlikely to have, partly by simplifying the language and partly by introducing some simplified accounting. It includes a version of the conceptual framework and runs to just under 230 pages. It can be used by private companies that are subsidiaries of listed companies, as well as independent private companies.

The standard is organized by topic and has some 35 chapters. It starts with concepts and principles, goes on to financial statement presentation and then looks at each of the financial statements, followed by a series of accounting issues. The standard is supported by a dedicated team at the IASB, headed by Dr Paul Pacter, ...

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