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SMEs Get Simplified Accounting Standard
28 Nov
Summary
- IFRS released a simplified accounting standard for SMEs globally.
- The standard simplifies processes and reduces disclosure obligations by 90%.
- Updates are scheduled triennially to minimize SME adaptation efforts.
The International Financial Reporting Standards (IFRS) Foundation has published a new accounting standard specifically designed for small and medium-sized enterprises (SMEs) globally. This self-contained standard is less than 330 pages and simplifies recognition and measurement processes compared to full IFRS standards.
Key adjustments include immediate expensing for all borrowing and development costs, simplified goodwill amortization, and a reduced disclosure burden of around 90%. The language is straightforward for easier international translation and adoption. Updates are planned triennially to minimize adaptation efforts for SMEs.
Jurisdictions can adopt this standard independently of full IFRS, with each deciding which entities may apply it, generally excluding those with public accountability. The IFRS Foundation has also initiated a search for a new managing director.
