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About the IFRS for SMEs Standard

The IFRS for SMEs Standard is a self-contained Standard (fewer than 250 pages) designed to meet the needs and capabilities of small and medium-sized entities (SMEs), which are estimated to account for more than 95 per cent of all companies around the world.

Compared with full IFRS Standards (and many national GAAPs), the IFRS for SMEs Standard is less complex in a number of ways:

  • Topics not relevant for SMEs are omitted; for example earnings per share, interim financial reporting and segment reporting.
  • Many principles for recognising and measuring assets, liabilities, income and expenses in full IFRS Standards are simplified. For example, amortise goodwill; recognise all borrowing and development costs as expenses; cost model for associates and jointly-controlled entities; and undue cost or effort exemptions for specific requirements.
  • 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 are expected to be limited to once every three years.

The SMEs Standard is available for any jurisdiction to adopt, whether or not it has adopted full IFRS Standards. Each jurisdiction must determine which entities should use the Standard. The Board's only restriction is that entities that have public accountability should not use it.

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