IASB Staff Members to Design Guidance on IFRS for SMEs

IASB has directed its staff members to design a guide in order to help small enterprises in applying and understanding Financial Reporting Standards. An IASB advisory committee, also known as the SME Implementation Group together with staff members of the International Accounting Standards Board will design a guidance that will help micro sized businesses in implementing IFRS. They will also prepare a complete draft and then approve and submit it to IASB for reviewing purpose.

Paul Pacter, one of the members of IASB stated that as many as eighty jurisdictions have applied or are thinking of adopting IFRS standards. While Pacter’s term will expire by 2012 end, it remains to be seen whether Unite States would be replacing him or not. At present, SEC has delayed its voting related decision as they are looking at ways to incorporate IFRS in America’s financial reporting framework. Countries that had agreed to apply IFRS in their financial system are hoping to occupy one of the positions as and when the voting process begins.

As far as small and medium enterprises in America are concerned, they have still not started using IFRS completely, despite the fact that they have got a go ahead from the American Institute for CPAs. Currently, the Financial Accounting Foundation is working in the direction of setting up a Private Company Council, which in turn will formalize and set standards for the private enterprises in the United States.

On the other hand, the small enterprises across the globe that are considering using International Financial Reporting Standards will be able to use the guidance being developed by the staff members of IASB. The guidance will contain only those elements that are applicable for SMEs. In addition to this, the guidance will not include modifications of any principles for measuring as well as recognizing assets, income, expenses and liabilities. It would only incorporate the primary principles that are related to those very requirements. Cross references to the International Financial Reporting Standards for small and medium entities on issue that have not been covered in the guidance will also be included in it.