Why ifrs for smes

IAS plus. Login or Register Deloitte User? Welcome My account Logout. Search site. Toggle navigation. Navigation Standards. Navigation Other pronouncements. Quick Article Links. Effective for annual periods beginning on or after 1 January ; earlier application permitted. Exploration and evaluation assets shall be measured on initial recognition at. Assess exploration and evaluation assets sfor impairment when facts and circumstances suggest that the carrying amount of an exploration and evaluation asset may exceed its recoverable amount.

Measure, present and disclose any resulting impairment loss in accordance with Section 27 Impairment of Assets. It comprises 35 sections and includes a glossary of terms. Illustrative financial statements and a disclosure checklist are presented within separate, non-mandatory implementation guidance.

The main differences are:. There are numerous built-in exemptions on the grounds of undue cost or effort, impracticability or inability to measure reliably. For example, Section 16 Investment Property requires entities to measure all investment properties at fair value provided that it can be measured reliably without undue cost or effort on an ongoing basis.

Examples of entities that hold assets in a fiduciary capacity include banks, insurance companies, brokers and dealers in securities, pension funds and mutual funds. It is not the IASB's intention to exclude entities that hold assets in a fiduciary capacity for reasons incidental to their primary business for example, travel agents, schools and utilities from utilizing IFRS for SMEs.

In fact, when developing the standard, the IASB focused on the needs of a typical mid-size private company.

The types and needs of users of SME financial statements are often different from the types and needs of users of public company financial statements and other entities that would likely use full IFRS. Full IFRS were designed to meet the needs of equity investors in companies in public capital markets. Users of the financial statements of SMEs or private companies in the U.

Rather, users of the financial statements of SMEs are more focused on shorter-term cash flows, liquidity, balance sheet strength, interest coverage and solvency issues. This burden has been growing as IFRS have become more detailed. As such, a significant need existed for an accounting and financial reporting standard for SMEs that would meet the needs of their financial statement users while balancing the costs and benefits from a preparer perspective.

The factors that drive a private company's choice of which financial accounting and reporting framework to follow in preparing its financial statements depend upon each company's objectives and the needs of their financial statement users.

These principles have guided the Board on the questions it has asked in its Request for Information, published in January The Request for Information seeks views on whether the principles provide the Board with a useful framework. It is also asking about specific topics that stakeholders have raised. Stakeholders can submit responses to the Request for Information in one of three ways :. When the Board has received all feedback and discussed recommendations, it will decide whether to issue an exposure draft that sets out the details of all proposed changes.

An exposure draft will also be open for public comment. A list of helpful links is provided below:. Darrel Scott. He was reappointed to the Board to serve a second term in To leave a comment below, login or register with IFAC.

May 3, Christine Lundberg Larsen. March 31, Kevin Dancey , Charles Tilley. February 22, Dr.