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IFRS VS IFRS for SME - A Streamlined Reporting Standard

sme_cover1The International Financial Reporting Standard for Small and Medium-sized Entities (IFRS for SMEs) as of 31 December 2012 is designed to apply to all entities that do not have public accountability.

The International Accounting Standards Board (IASB) developed the IFRS for SMEs in recognition of the cost and difficulty to relatively small private entities of preparing fully compliant IFRS information. The IASB also recognised that users of private entity financial statements may have a different focus from those interested in publicly listed companies.

The IFRS for SMEs attempts to meet needs whilst trying to balance the costs and benefits to the preparers of the financial statements. The IFRS for SMEs is a stand-alone standard and does not require cross-referencing to IFRSs.

In addition, the IFRS for SMEs contains fewer disclosure requirements in a dramatically shorter document compared to IFRSs and therefore appeals to both the users and preparers of financial statements.

The IFRS for SMEs standard is potentially available for immediate use, however it is for the relevant standard setters and authorities in each country to decide which entities are permitted and/or required to apply IFRS for SMEs.

The purpose of this publication is to help preparers and users understand the differences that exist between IFRS for SMEs and IFRSs as issued by the IASB. It is only intended to provide a high level overview of the major differences and is not intended to be a comprehensive list of all differences that users and preparers should be aware of. This publication does not deal with the consequences of local law on the preparation of financial statements and additional significant differences may arise when comparing the requirements of the IFRS for SMEs to the legal requirements in a particular jurisdiction.