The following are the results of a survey done by CPA Australia and the Corporate Governance & Financial Reporting Centre (CGFRC) at the National University of Singapore (NUS). It is reported in BT today.
- 42% agreed with the definition of an SME in the proposed IFRS as ‘entities that do not have public accountability and publish general purpose financial statements for external users’.
- More than 60% felt that we should also include large unlisted companies which do not have public accountability into the new standard.
- 72% said the new standard would better meet the needs of users of SMEs’ financial statements.
- 69% said they feel it would reduce the financial reporting burden for SMEs that want to use global reporting standards.
- 59% said they believe it would reduce the audit burden of SMEs in general.
- Banks who lend monies to SMEs are expected to be the main users of the financial statements.
What are some of the suggestions to simplify certain accounting treatments for SMEs?
SMEs are generally not in favour of complex accounting standards – for example:-
- share-based payments,
- accounting for impairment,
- fair value accounting.
What are the respondents’ concerns?
- Adopting SME-specific accounting standards today would lead to difficulties in aligning financial statements to full IFRS in future, when needed.
- SMEs today may dread the work of converting from current full FRS to the new SME standards.
- Many believe the guidance to implement the proposed IFRS for SMEs is inadequate.
P/S – On Wed, I will attend the Mr Kon’s presentation at ASME.