Glossary
IFRS for SMEs
A simplified international accounting standard for entities without public accountability, used to prepare general purpose financial statements.
IFRS for SMEs is an international accounting standard issued by the International Accounting Standards Board. It is a simplified version of full IFRS, written for entities that do not have public accountability. In broad terms, that means entities whose debt or shares are not publicly traded and that do not hold assets for a wide group of outsiders, as a bank does.
Compared with full IFRS, the standard has fewer topics, simpler recognition and measurement rules, and fewer disclosures. This makes it easier and less costly to apply for many small and medium-sized businesses and non-profit organisations.
It is used to prepare general purpose annual financial statements (AFS): the statements that owners, lenders, funders and other outside users rely on.
Whether your entity must, or may, use IFRS for SMEs depends on the law that applies to it, its constitution and the requirements of lenders or funders. Some funders also ask for special purpose reports in their own format, alongside the AFS.
If you are changing framework, plan early. The first year needs restated comparatives and clear notes explaining the change.
The firm will confirm which framework applies to your entity. This entry is general information, not professional advice.