WORLD ACADEMY OF INFORMATICS AND MANAGEMENT SCIENCES
ISSN : 2278-1315
governmental authorities. Financial statements produced
solely for those purposes are not necessarily general purpose
This is true for full IFRS which are used by incorporated
financial statements. Tax laws are specific to each
companies or organization and for the IFRS for SMEs.
jurisdiction, and the objectives of general purpose financial
However, a clear definition of the class of entity for which the
reports differ from the objectives of reporting taxable profit.
IFRS for SMEs is intended, as set out in Section One (1) of
Thus, financial statements prepared in conformity with the
the full IFRS for SMEs downloadable at www.ifrs.org of the
IFRS for SMEs are unlikely to comply fully with all of the
Standard and is essential so that:
measurements required by a jurisdiction’s tax laws and
regulations. A jurisdiction may be able to lessen the ‘dual
The IASB can decide on the accounting and disclosure
reporting burden’ on SMEs by structuring tax reports as
requirements that are appropriate for that class of entity; and
reconciliations from the profit or
loss determined in
accordance with the IFRS for SMEs and by other means.
The legislative and regulatory authorities, standard-setters and
reporting entities and their auditors will be informed of the
intended scope of applicability of the IFRS for SMEs.
Authority of the IFRS for SMEs
A clear definition is also essential so that entities that are not
Decisions on which entities are required or permitted to use
small or medium-sized entities, and therefore are not eligible
the IASB’s Standards rest with legislative and regulatory
to use the IFRS for SMEs, do not assert that they are in
authorities and standard-setters in individual jurisdictions.
compliance with it.
MAINTENANCE OF THE IFRS FOR SMES
SECTION
3
FINANCIAL
STATEMENT
The IASB expects to propose amendments to the IFRS for
PRESENTATIONS
SMEs by publishing an omnibus Exposure Draft
This section explains fair presentation of financial statements,
periodically, but not more frequently than approximately
what compliance with the IFRS for SMEs requires and what a
once every three years. In developing those Exposure
complete set of financial statements is.
Drafts, it expects to consider new and amended full IFRS
SECTION 4 STATEMENT OF FINANCIAL POSITION
Standards as well as specific issues that have been brought
This section sets out the information that is to be presented in
to its attention regarding application of the IFRS
for
a statement of financial position and how to present it. The
SMEs. On occasion, the IASB may identify an urgent matter
statement of financial position (sometimes called the balance
for which amendment of the IFRS for SMEs may need to be
sheet) presents an entity’s assets, liabilities and equity as of a
considered outside the periodic review process. However,
specific date. Usually, the end of the reporting period.
such occasions are expected to be rare.
SECTION 5 STATEMENT OF COMPREHENSIVE
INCOME AND INCOME STATEMENT
Until the IFRS for SMEs is amended, any changes that the
This section requires an entity to present its total
IASB may make or propose with respect to full IFRS do not
comprehensive income for a period i.e. its financial
apply to the IFRS for SMEs. The IFRS for SMEs is a stand-
performance for the period, in one or two financial statements.
alone document. SMEs shall not anticipate or apply
It sets out the information that is to be presented in those
changes made in full IFRS before those changes are
statements and how to present it.
incorporated into the IFRS for SMEs unless, in the absence
SECTION 6 STATEMENTS OF CHANGES IN EQUITY
of specific guidance in the IFRS for SMEs, an SME chooses
AND STATEMENT OF INCOME AND RETAINED
to apply guidance in full IFRS and those principles do not
EARNINGS
conflict with requirements in the hierarchy in paragraphs.
This section sets out requirements for presenting the changes
in an entity’s equity for a period, either in a statement of
The IASB expects that there will be a period of at least one
changes in equity or, if specified conditions are met and an
year between when amendments to the IFRS for SMEs are
entity chooses, in a statement of income and retained earnings.
issued and the effective date of those amendments.
SECTION 7 STATEMENTS OF CASH FLOWS
This section sets out the information that is to be presented in
Summary Sections of the International Financial
a statement of cash flows and how to present it. The statement
Reporting Standard (IFRS) for Small and Medium-sized
of cash flows provides information about the changes in cash
Entities
and cash equivalents of an entity for a reporting period,
IFRS for SMEs is arrange in sections and below are the
showing separately changes from operating activities,
sections for clear understanding:
investing activities and financing activities.
SECTION 1: SMALL AND MEDIUM-SIZED ENTITIES
SECTION 8 NOTES TO THE FINANCIAL STATEMENTS
The IFRS for SMEs is intended for use by small and
This section sets out the principles underlying information
medium-sized entities (SMEs). This section describes the
that is to be presented in the notes to the financial statements
characteristics of SMEs.
and how to present it. Notes contain information in addition
SECTION 2 CONCEPTS AND PERVASIVE PRINCIPLES
to that presented in the statement of financial position, the
This section describes the objective of financial statements
statement of comprehensive income (if presented), the
of small and medium-sized entities (SMEs) and the qualities
income statement (if presented), the combined statement of
that make the information in the financial statements of
income and retained earnings (if presented), the statement of
SMEs useful. It also sets out the concepts and basic
changes in equity (if presented) and the statement of cash
principles underlying the financial statements of SMEs.
flows. Notes provide narrative descriptions or disaggregations
of items presented in those statements and information about
items that do not qualify for recognition in those statements.
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ENDEAVOR 2019 | WAIMS ACADMIC PRESS
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