What is the difference between IFRS and IFRS for SME?

IFRS requires the use of the equity method in the consolidated accounts (or proportionate consolidation for JCEs). IFRS for SMEs, entities can use the cost model, the equity method or the fair value model, which gives entities much greater flexibility to select a policy most appropriate to their business.

Who qualifies for IFRS for SME?

All entities apart from public companies, state- owned companies and certain non-profit companies are allowed to apply the IFRS for SMEs. Profit companies, other than state owned or public companies, whose public interest score for the particular financial year is at least 350.

What is IFRS for SMEs standard?

IFRS for SMEs is a self-contained global accounting and financial reporting standard applicable to the general-purpose financial statements of, and other financial reporting by, entities that in many countries are known as small- and medium-sized entities.

Can SME use full IFRS?

Yes. The AICPA’s governing Council recognizes the IASB as an accounting body for purposes of establishing international financial accounting and reporting principles. Full IFRS and IFRS for SMEs are not an other comprehensive basis of accounting. Rather, they are generally accepted accounting principles.

Does IFRS for SMEs require consolidation?

Except in the very limited circumstances set out in paragraphs 9.3 and 9.3C, the IFRS for SMEs Standard requires a parent entity to present consolidated financial statements.

Why is there a need to have a separate IFRS standard for SMEs?

One aim of the IFRS for SMEs is to provide a standard for entities in countries that have no national GAAP. IFRS for SMEs will provide an accounting framework in such countries for entities that are not of the size nor have the resources to adopt full IFRS.

What is the IFRS for SMEs standard?

The IFRS for SMEs Standard reflects five types of simplifications from full IFRS Standards: the text of full IFRS Standards has been redrafted in ‘plain English’ for easier understandability and translation.

What is IFRS for small and medium-sized entities?

The IFRS for Small and Medium-sized Entities is organised by topic, with each topic presented in a separate section. All of the para­graphs in the standard have equal authority. The standard is ap­pro­pri­ate for general purpose financial state­ments and other financial reporting of all profit-ori­ented entities.

Should private companies use IFRS for financial accounting and reporting?

Private companies should be allowed to choose the financial accounting and reporting framework that best suits their objectives and the needs of their financial statement users. IFRS for SMEs represents another valuable financial accounting and reporting option for private companies to consider using, depending upon their unique circumstances.

What are the types and needs of SME financial statements?

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.