The International Accounting Standards Board issued an update Thursday to the International Financial Reporting Standard for Small and Medium-sized Entities Accounting Standard which aims to balance the needs of leaders and users of SMEs’ financial statements with resources available to SMEs.
The standard, currently required or permitted in 85 jurisdictions, defines SMEs as entities without public accountability that prepare general purpose financial statements.
A result of a periodic and comprehensive review of the standard, the update includes:
- A revised model for revenue recognition;
- Bringing together the requirements for fair value measurement in a single location; and,
- Updating the requirements for business combinations, consolidations and financial instruments.
“The update to the IFRS for SMEs Accounting Standard will improve the information provided to users of SMEs’ financial statements while maintaining the simplicity of the standard,” IASB chair Andreas Barckow said in a statement.
This update is effective for annual periods beginning on or after Jan. 1, 2027, with early application permitted.
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