An exposure draft has been published today by the International Accounting
Standards Board, detailing possible accounting rules for
the small and medium-sized companies.
The document proposes International Financial Reporting Standards for smaller
companies which aim to be a self-contained set of accounting rules for
The IASB said the simplified set of rules were achieved by a series of
changes, which included the removal of choices for accounting treatment,
eliminating topics that are not generally relevant to
SMEs and simplifying methods for
recognition and measurement.
The proposed rules, which are about 85% smaller than a full set of IFRS
standards, would for the first time give investors the opportunity to compare
SMEs’ financial performance across international boundaries on a like-for-like
SMEs which decide to upgrade to using full IFRSs would find the transition
eased because both sets of standards are based on the same underlying
IASB chairman, Sir David Tweedie, said
the goal of the IASB has been to produce a standard for use by smaller and
unlisted companies that offers the comparability of full IFRSs while reducing
the burden on the preparing company.
‘When completed, the SME standard will make the accounting requirements more
accessible to smaller preparers in both developed and emerging markets,’ said
Tweedie. ‘With this publication, we are now actively seeking the views of
companies, banks, the audit profession, and other interested parties as part of
a broad consultation to see if we’ve taken out too much or not enough or if
we’ve got it about right.’
The adoption of the IFRSs for SMEs will be a matter for each country or
adopting jurisdiction to decide.
The EU requires listed companies to comply with International Financial
Reporting Standards (IFRSs), but will leave it to Member States to decide which
standards SMEs should follow.
The IASB proposes that listed companies, however small, would not be eligible
to use the IFRS for SMEs.
The Exposure Draft is available for IFRS subscribers from today and will be
freely available on the IASB website from
26 February 2007.
The IASB invites comments on the Exposure Draft by 1 October 2007.
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