About the IFRS for SMEs
The IFRS for SMEs is a self-contained standard of 230 pages, designed to meet the needs and capabilities of small and medium-sized entities (SMEs), which are estimated to account for over 95 per cent of all companies around the world.
Compared with full IFRSs (and many national GAAPs), the IFRS for SMEs is less complex in a number of ways; to read more about how complexity was reduced, click here.
- Topics not relevant for SMEs are omitted. Examples: earnings per share, interim financial reporting, and segment reporting.
- Where full IFRSs allow accounting policy choices, the IFRS for SMEs allows only the easier option. Examples: no option to revalue property, equipment, or intangibles; a cost-depreciation model for investment property unless fair value is readily available without undue cost or effort.
- Many principles for recognising and measuring assets, liabilities, income and expenses in full IFRSs are simplified. For example, amortise goodwill; expense all borrowing and R&D costs; cost model for associates and jointly-controlled entities; no available-for-sale or held-to-maturity classes of financial assets.
- Significantly fewer disclosures are required (roughly a 90 per cent reduction).
- The standard has been written in clear, easily translatable language.
- To further reduce the burden for SMEs, revisions to the IFRS will be limited to once every three years.
Access the standard here.
The standard is available for any jurisdiction to adopt, whether or not it has adopted full IFRSs. Each jurisdiction must determine which entities should use the standard. The IASB’s only restriction is that listed companies and financial institutions should not use it.
To assist in implementation, the IFRS Foundation and the IASB have taken a number of steps:
- IFRS for SMEs free to download - The standard and related implementation guidance are free to download for private, non-commercial use. The IFRS for SMEs is available in more than a dozen languages in addition to English, click here.
- Implementation guidance - The IFRS for SMEs is accompanied by implementation guidance consisting of illustrative financial statements and a presentation and disclosure checklist.
- Training material - The IFRS Foundation is developing comprehensive free to download training material to support the implementation of the IFRS for SMEs these are available in Arabic, English, Russian, Spanish and Turkish, click here.
- IFRS Taxonomy - The IFRS Taxonomy is a translation of IFRSs - including the IFRS for SMEs - into XBRL (eXtensible Business Reporting Language). XBRL is a digital 'language' used to communication information between businesses and other users of financial information.
- Workshops - The IFRS Foundation is holding regional ‘train the trainers’ workshops, in co-operation with regional professional associations and the world’s development agencies, to build capacity for the implementation of the IFRS for SMEs, particularly in developing and emerging economies, for more information click here.
- Newsletter – We publish a free monthly newsletter IFRS for SMEs Update with news about adoptions, resources, and implementation guidance. Click here for more information.
- SME Implementation Group – We have appointed an implementation group to develop non-mandatory implementation guidance in the form of Q&As. Click here for more information.
- Presentations – We are making some Board member and staff presentations about the IFRS for SMEs available for free download. Click here for more information.
- Q&As – Q&As developed by the Implementation Group as guidance in applying the IFRS for SMEs. Click here for more information.