Ifrs for Small and Medium Sized Entities

Ifrs for Small and Medium Sized Entities

  • Submitted By: brian3999
  • Date Submitted: 12/04/2010 11:10 AM
  • Category: Business
  • Words: 811
  • Page: 4
  • Views: 385

In July of 2009, the International Accounting Standards Board (IASB) released IFRS for Small and Medium Sized Entities, which provides an alternative accounting framework for companies meeting certain eligibility criteria. IFRS for SME’s is a self-contained, comprehensive set of standards specifically designed for entities that do not have public accountability.
IFRS for SME’s contains many of the principles of full IFRS, but simplifies a number of areas that are generally less complicated or relevant for small to medium sized entities. IFRS for SME’s significantly streamlines the volume and depth of disclosures required by full IFRS. There are a lot of disclosures that are more user friendly for private entity stakeholders. There are certain areas that were deemed less relevant to SME’s, including earnings per share, segment reporting, insurance, and interim financial reporting, that are completely omitted from the IFRS for SME’s guidance.
There are other cases, where certain full IFRS principles were simplified to be more relevant for private entities. Some examples are financial instruments, intangible assets, borrowing costs, property, plant, and equipment, investment properties, and defined benefit pension plans. Under IFRS, all financial instruments are measured at fair value. There are four measurement categories for financial instruments: assets or liabilities at fair value, held-to-maturity investments, loans and recievables, and available-for-sale assets. IFRS for SME’s measures financial instruments at cost or amortized cost. The fair value is measured at profit and loss. The ineffectiveness is measured at year end. There is also an option to apply IAS 39. Under full IFRS for intangible assets are carried at cost or revaluation. You must capitalize and amortize finite lived intangibles. You must capitalize and review indefinite lived intangibles, including goodwill, for impairment annually. IFRS for SME’s carries at cost less depreciation. There is...

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