|Extent of IFRS application||Status||Additional Information|
|IFRS Accounting Standards are required for domestic public companies||No stock exchange.|
|IFRS Accounting Standards are permitted but not required for domestic public companies||No stock exchange. IFRS Standards permitted for financial institutions.|
|IFRS Accounting Standards are required or permitted for listings by foreign companies||No stock exchange.|
|The IFRS for SMEs Accounting Standard is required or permitted||IFRS for SMEs has not been adopted. However, SMEs are permitted to use it.|
|The IFRS for SMEs Accounting Standard is under consideration|
Profile last updated: 16 June 2016
Conseil Supérieur de la Comptabilité (CSC) [Higher Council of Accounting]
Ordre des Experts Comptables et Financiers de Madagascar (OECFM) [Society of Accounting and Finance Experts of Madagascar]
The OECFM’s commitment to IFRS Standards is set out in its August 2013 “Action Plan” submitted to the International Federation of Accountants (IFAC) as part of IFAC’s member body compliance assessment programme: www.ifac.org/sites/default/files/compliance-assessment/part_3/201308 Madagascar OECFM V2.pdf
The existing Madagascar accounting standards are known as The National Accounting Plan “PCG 2005-Consistent IAS/IFRS”. The plan was developed by the CSC in 2005 (and there are plans of updating it if financing from the World Bank is obtained). The CSC has stated that in developing the plan it tried to “base those standards on IFRS” as published in 2004.
PGC-2005 allows any entity to choose to apply full IFRS Standards or the IFRS for SMEs Standard, provided that it can demonstrate that the resulting financial statements are an improvement over financial statements prepared under PGC-2005.
In practice, in order to avoid having problems with the fiscal authority, entities (and in particular subsidiaries of foreign entities) prefer having two sets of financial statements prepared: (a) one set of statements compliant with PCG 2005, which is used for tax purposes and other local purposes, and (b) a second set compliant with IFRS Standards (or sometimes US GAAP), which is incorporated in the consolidated financial statements of the parent company.
SMEs use the national accounting standards known as PGC-2005. But PGC permits any entity to choose to apply full IFRS Standards or the IFRS for SMEs Standard. So SMEs have the choice of PGC-2005, full IFRS Standards, or the IFRS for SMEs Standard.
Very small-sized entities – those with annual turnover less than MGA 20 million (around Euros 5,500) – keep their accounting records according to the minimum system of cash (Système Minimal de Trésorerie SMT), a system similar to a cash basis of accounting, and the financial statements are simplified.