(IFRS) for Small and Medium-sized Entities (SMEs)
(IFRS) for Small and Medium-sized Entities (SMEs)
(IFRS) for Small and Medium-sized Entities (SMEs)
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<strong>IFRS</strong> FOR SMES – JULY 2009P6 <strong>IFRS</strong>s set out recognition, measurement, presentation <strong>and</strong> disclosurerequirements dealing with transactions <strong>and</strong> other events <strong>and</strong> conditions that areimportant in general purpose financial statements. They may also set out suchrequirements <strong>for</strong> transactions, events <strong>and</strong> conditions that arise mainly in specificindustries. <strong>IFRS</strong>s are based on the Framework, which addresses the conceptsunderlying the in<strong>for</strong>mation presented in general purpose financial statements.The objective of the Framework is to facilitate the consistent <strong>and</strong> logical<strong>for</strong>mulation of <strong>IFRS</strong>s. It also provides a basis <strong>for</strong> the use of judgement in resolvingaccounting issues.General purpose financial statementsP7P8<strong>IFRS</strong>s are designed to apply to the general purpose financial statements <strong>and</strong> otherfinancial reporting of all profit-oriented entities. General purpose financialstatements are directed towards the common in<strong>for</strong>mation needs of a wide rangeof users, <strong>for</strong> example, shareholders, creditors, employees <strong>and</strong> the public at large.The objective of financial statements is to provide in<strong>for</strong>mation about thefinancial position, per<strong>for</strong>mance <strong>and</strong> cash flows of an entity that is useful to thoseusers in making economic decisions.General purpose financial statements are those directed to general financialin<strong>for</strong>mation needs of a wide range of users who are not in a position to dem<strong>and</strong>reports tailored to meet their particular in<strong>for</strong>mation needs. General purposefinancial statements include those that are presented separately or withinanother public document such as an annual report or a prospectus.The <strong>IFRS</strong> <strong>for</strong> <strong>SMEs</strong>P9P10P11The IASB also develops <strong>and</strong> publishes a separate st<strong>and</strong>ard intended to apply to thegeneral purpose financial statements of, <strong>and</strong> other financial reporting by, entitiesthat in many countries are referred to by a variety of terms, including small <strong>and</strong>medium-<strong>sized</strong> entities (<strong>SMEs</strong>), private entities, <strong>and</strong> non-publicly accountableentities. That st<strong>and</strong>ard is the International Financial Reporting St<strong>and</strong>ard <strong>for</strong> <strong>Small</strong> <strong>and</strong><strong>Medium</strong>-<strong>sized</strong> <strong>Entities</strong> (<strong>IFRS</strong> <strong>for</strong> <strong>SMEs</strong>).The term small <strong>and</strong> medium-<strong>sized</strong> entities as used by the IASB is defined <strong>and</strong>explained in Section 1 <strong>Small</strong> <strong>and</strong> <strong>Medium</strong>-<strong>sized</strong> <strong>Entities</strong>. Many jurisdictions aroundthe world have developed their own definitions of <strong>SMEs</strong> <strong>for</strong> a broad range ofpurposes including prescribing financial reporting obligations. Often thosenational or regional definitions include quantified criteria based on revenue,assets, employees or other factors. Frequently, the term <strong>SMEs</strong> is used to mean orto include very small entities without regard to whether they publish generalpurpose financial statements <strong>for</strong> external users.<strong>SMEs</strong> often produce financial statements only <strong>for</strong> the use of owner-managers oronly <strong>for</strong> the use of tax authorities or other governmental authorities. Financialstatements produced solely <strong>for</strong> those purposes are not necessarily generalpurpose financial statements.© IASCF 7
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