Last week the International Accounting Standards Board (IASB) issued a staff overview of the exposure draft of International Financial Reporting Standard (IFRS) for Small and Medium-Sized Entities (SMEs). While the Board has not yet approved the overview, it constitutes “a high level introduction” to the proposals. The project, initiated over three years ago, is developing an IFRS to meet the particular needs of SMEs, entities that: (1) do not have public accountability; and (2) publish general purpose financial statements for external users such as vendors, creditors, etc.
Among other goals, the IFRS would provide simplified, self-contained standards for SMEs, allowing the Board to shrink its guidance by over 85% (compared to full IFRSs); it would enable users to compare an SME's financial performance, financial condition, and cash flows while reducing the burden of preparing SME financial statements. The standards would also “provide emerging economies with an internationally recognized basis for financial reporting, helping to significantly raise standards in many countries whilst offering a clear upgrade path to full IFRS compliance.” For a copy of the exposure draft, click here. Comments are due by October 1, 2007.