IFRS for SMEs is small, small enough?

Abstract

The IASB is moving closer and closer to issuing the International Financial Reporting Standard for Small and Medium-Sized Entities. The IFAC suggests that these smaller entities or "micro-entities" may have information needs that are more restricted than those of other small and medium enterprises, and compliance with full IFRS or proposed IFRS for SMEs may continue to be to burdensome. An IFAC report indicates that significant research needs to be conducted worldwide to identify exactly what the users' needs are in respect of micro-entities' financial reports. Of particular concern to IFAC is less developed economies in which low literacy levels, lack of accounting education and absence of computerized accounting systems, amongst other things, may be further impairing the ability of such entities to produce fairly presented financial information in accordance with IFRS.