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In July 2009, the International Accounting Standards Board released the IFRS for Small and Medium-Sized Entities (SMEs). This is a version of IFRS which is less complex than the full set of standards and applies to SMEs, private companies, and non-publicly accountable entities. Worldwide, these types of organizations are estimated to make up about 95% of the companies. Each jurisdiction has its own definition of SMEs and also has the ultimate authority over whether or not IFRS for SMEs can be adopted. In the U.S., most nonpublic companies fit the SME definition. The U.S. regulatory authorities have recently set up a task force to determine whether IFRS for SMEs will be allowed or whether the U.S. will create its own GAAP for Private Enterprises.
In Canada, eligible companies may choose between IFRS and the newly released GAAP for Private Enterprises. GAAP for Private Enterprises is based on existing Canadian GAAP but there are still some differences. The CICA Handbook has been reorganized and GAAP for Private Enterprises is in Part II of the Handbook.
Click here for more information on how to make a choice between Private Enterprise GAAP and IFRS for private companies in Canada.
To read a summary of the key simplications to IFRS for SMEs, click here.
To read the full set of standards of IFRS for SMEs, click here. (Please note that you will have to register with the IASB in order to access the content. Registration is free of charge.)
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