Question

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.

State your reflection on the topic "Supporting materials for the IFRS for SMEs Standard" and video can also be viewed here: https://www.ifrs.org/supporting-implementation/supporting-materials-for-the-ifrs-for-smes/

Answer 1

Reflection on "supporting materials for the IFRS for SMEs standard"

Small and Medium size companies are of very much importance as they constitues about 95% of the total companies In the world. IFRS for SMEs is a very great concept.

# As we all know snall companies usually runs into problem, because they dont have enough working capital or investing capital. However, with the IFRS for SMEs make a difference by reducing cost of capital by increasing the quality of financial reports.

# IFRS for SMEs will increase the ability of users to compare the accounts because in SMEs users are very close to the company and can interact with the company directly.

# Full IFRS basically introduced keeping in mind the need of large companies but eventually it also applies to small companies. However, change is required and hence IFRS for SMEs can be very helpful beacuse small companies have less complex issues, less resources.

# Also SMEs do not have any public accountability, so there is no need to waste efforts and money on preparing detailed amd irrelevant reports.

# simplified and easy understanding standards helps in creating the confidence of the management in its operations and also quality work and report with create value of the company