Do SMEs really need to follow IFRS to the letter?
Peter Williams ponders the popular argument International accounting standards are too often associated solely with quoted companies. The financial reporting needs of the world’s capital markets may dominate the headlines but small and medium sized enterprises (SMEs) make a significant contribution to the global economy, and a set of coherent accounting standards for this vital sector is long overdue. The problem for those dealing with SME financial reporting is that the standard setters have traditionally concentrated on getting it right for the listed companies – representing less than 1% of all enterprises – while the small firm sector has been handed down complex standards that could not, and should not, apply to them. The IASB is promising to improve the regime for SMEs. It is following a route taken by many national standard setters which are already providing exemptions or simplifications for SMEs within their own accounting requirements. In other countries where SMEs are, in th
