SME standards finally issued

The international standard-setter has today published its long-awaited International Financial Reporting Standard for SMEs after five years of consultation on the standards.

The International Accounting Standards Board aimed to produce a standard which is less complex than full IFRS and which would improve comparability for SME users of accounts, who comprise 95% of businesses.

Commenting on the standard, IASB chairman Sir David Tweedie said: ‘For the first time, SMEs will have a common high quality and internationally respected set of accounting requirements. We believe the benefits will be felt in both developed and emerging economies.’

Within IFRS for SMEs, some of the principles concerning recognising and measuring assets, liabilities, incomes and expenses have been simplified in comparison to full IFRS. Topics that do not affect SMEs have been omitted and there are fewer disclosure requirements.

Other benefits to be drawn from IFRS for SMEs is the reduction in significant costs involved in maintaining standards on a national basis. The IASB believes this will provide leverage for growing businesses preparing to enter public capital markets - where full IFRS is required.

Paul Pacter, director of standards for SMEs, said: ‘The IFRS for SMEs will provide businesses with a passport to raise capital on a national or an international basis.’