What does one do when an entity has a transaction not addressed in IFRS for SMEs?
If IFRS for SMEs does not specifically address a transaction, other event or condition, an entity’s management shall use its judgment in developing and applying an accounting policy that results in information that is: (a) relevant to the economic decision-making needs of users, and (b) reliable, in that the financial statements: (i) represent faithfully the financial position, financial performance and cash flows of the entity; (ii) reflect the economic substance of transactions, other events and conditions, and not merely the legal form; (iii) are neutral (in other words, free from bias); (iv) are prudent; and (v) are complete in all material respects. In making the judgment described above, management should refer to, and consider the applicability of, the following sources in descending order: (a) the requirements and guidance in IFRS for SMEs dealing with similar and related issues, and (b) the definitions, recognition criteria and measurement concepts for assets, liabilities, inc
