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07 Nov 2011
EUROPEAN standard setters seem unconvinced by international financial reporting standards for SMEs.
Liesel Knorr, president of the German Accounting Standards Board, said there is no possibility of so-called FRSME in Germany, pointing to a recent overhaul of the country's standards and lack of political desire for a second upheaval.
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France's Jérôme Haas, chairman of accounting standard setter the ANC, suggested FRSME is just "jargon", questioning whether it is "a language that nobody speaks".
David Loweth, technical director of the ASB in the UK, was less negative, but highlighted the many and varied concerns of SMEs consulted on adopting a light-weight version of the global accounting standards.
Global standard setter the IASB has itself implied it is not hugely concerned about uptake of FRSME, saying it was developed in response to calls from countries with under-developed national accounting standards and is not the most important part of its work.
FRSME is more popular outside of Europe, with more than 80 countries now signed up in the three years since it was launched.
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Visitor comments Add your comment
It's no surprise
For a long time, many continental European countries (including France and Germany) have had perfectly good national accounting requirements for SMEs which link with their national tax and similar requirements. Therefore, they don't need IFRS for SMEs and would be foolish to replace what they already have and understand with IFRS for SMEs. What these countries may have lacked in the past was a system for listed companies which met the needs of capital providers - hence their support for the use of full IFRS in the consolidated financial statements of listed companies.
The UK was different. It developed accounting standards primarily aimed at listed companies but then made the mistake of requiring all SMEs to follow them. The FRSSE helped sort that out.
Also bear in mind that the debate is as much about politics as about technical accounting. The typical, straightforward SME will get the same accounting for day to day transactions whether it is using German GAAP, French GAAP, UK GAAP, the UK FRSSE, full IFRS or IFRS for SMEs. However, the SME and its accountant don't need a 500 page manual, let alone a 3,000 page manual, to tell them this!
Posted by: David Cairns, 08 Nov 2011 | 11:26
David - you're spot-on
David what an elegant, eloquent summary of the way the world of SME accounting actually is, from someone who knows what he's talking about.
Now we need to get the FRSSE and the Accounting Regulations which support CA 2006 simplified in a meaningful way.
Posted by: Nigel Hughes, 10 Nov 2011 | 10:49