IFRS for SMEs
I have written previously about the FRSSE, which is a summarised set of accounting rules used by some private companies in the UK and Ireland. Since 2005, all public companies throughout Europe use what are called International Financial Reporting Standards (IFRS). These standards are complex and the bound volume runs to a few thousand pages. Not the sort of thing a smaller private company might find all that useful when preparing its financial statements. In the UK, a body called the Accounting Standards Board (ASB) is responsible for implementing all accounting standards. In August 2009, the ASB decided to adopt the IFRS for Small and Medium-sized Entreprises (IFRSSME) with effect from January 1, 2012. According to accounting firm Deloitte (see this link), this means that approximately 50,000 larger private companies will have to adopt the IFRSSME, while about 2 million others can continue to use the FRSSE. Unlike its big cousins, the IFRSSME is small and compact, at around 230 pages of rules. The International Accounting Standards Board (IASB) hope that the IFRSSME will meet the needs of SMEs, who typically account for 90-95% of businesses in any country. Unlike the full IFRS, the IFRSSME is not compulsory in the UK or any other EU nation, but watch this space.
The IFRSSME can be downloaded free at this link.