WORLD ACADEMY OF INFORMATICS AND MANAGEMENT SCIENCES
ISSN : 2278-1315
5. To help us develop a knowledge-sharing community,
please do get in touch to share your experiences,
INTERNAIONAL
FINANCIAL
REPORTING
observations and opinions with us.
STANDARD FOR SMALL AND MEDIUM-SIZED
ENTITIES (IFRS FOR SMES)
REFERENCES
1. C Dweck. Mindset: Changing
INTRODUCTION
The Way You Think To Fulfil
Your Potential (London, 2017).
IFRS for SMEs is a modification and simplification of full
p.6.
IFRS aimed at meeting the needs of private company financial
2. CGMA.
Finance
Business
reporting users and easing the financial reporting burden on
Partnering: The Conversations
private companies through a cost-benefits approach. IFRS for
That Count (London, 2015).
SMEs is a self-contained global accounting and financial
3. Chui, J Manyika & M Miremadi.
reporting standard applicable to the general purpose financial
Where Machines could replace
reporting by, entities that in many countries are known as
humans – and where they can’t
small and medium sized entities.
(yet) (McKinsey Quarterly, July
2016). Ibid,. p.141. Ibid,. p.263.
The basic objectives of IFRS for SMEs are to ensure entities
Ibid,. p.5.
that are not of the size nor have resources to use full IFRS are
4. J Haskel & S Westlake.
not left out in the international financial reporting guideline.
Capitalism Without Capital: The
This is because SMEs form part of the business community
Rise of the Intangible Economy
and are very important to the economic development of a
(Oxford, 2018). p.196-197.
nation, therefore need a good international standard for
5. K
Kelly.
The
Inevitable:
reporting their activities. Stakeholders (government, investor
Understanding
The
12
etc.) also need appropriate information concerning their
Technological Forces That Will
activities.
Shape Our Future (London,
2017). p.289.
As such, a significant need existed for an accounting and
6. M Syed. Learning from Life and
financial reporting standard for SMEs that would meet the
Death. BBC Radio 4, London, 2
needs of their financial statement users while balancing the
July 2017.
costs and benefits from a preparer perspective. IFRS for
7. P Thiel. Zero to One: Notes on
SMES was designed to meet that need.
The IFRS for SMEs
Startups, or How to Build the
Future (London, 2014). p.102.
8. T Harford. Messy: How To Be
Creative And Resilient In A
Tidy-Minded World (London,
2016). p.196.
The impact of this upon an expanding finance function
mandate is explored in ‘Emerging theme 1: The changing
role and mandate of finance’, under the ‘Broad Finance
Roles’ section.
www.waims.co.in
The IASB (International Accounting Standard Board)
develops and issues a separate Standard intended to apply to
the general purpose financial statements of, and other
financial reporting by, entities that in many countries are
referred to by a variety of terms, including small and
medium-sized entities (SMEs), private entities and non-
publicly accountable entities. That Standard is the
International Financial Reporting Standard for Small and
Medium-sized Entities (IFRS for SMEs). The IFRS for SMEs
is based on full IFRS with modifications to reflect the needs
of users of SMEs’ financial statements and cost-benefit
considerations. The term small and medium-sized entities as
used by the IASB is defined as: Small and medium-sized
entities are entities that: Do not have public accountability;
and Publish general purpose financial statements for external
users. Examples of external users include owners who are not
involved in managing the business, existing and potential
creditors, and credit rating agencies.
Many jurisdictions around the world have developed their
own definitions of SMEs for a broad range of purposes
including prescribing financial reporting obligations. Often
those national or regional definitions include quantified
criteria based on revenue, assets, employees or other factors.
Frequently, the term SMEs is used to mean or to include very
small entities without regard to whether they publish general
purpose financial statements for external users.
SMEs often produce financial statements only for the use of
owner-managers or only for the use of tax authorities or other
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