IFRS for SMEs

Question 1

Identify some of the possible advantages of using IFRS for SMEs, instead of US GAAP, by eligible entities.

Answer 1

(1) More relevant standards
(2) Less complicated and voluminous standards
(3) Less costly standards to implement
(4) Less frequent changes in standards

Question 2

What are the various types of generally accepted accounting principles which may be used by a US entity?

Answer 2

Depending on the entity, the following types of generally accepted accounting principles may be used:

(1) US GAAP
(2) US Other Comprehensive Basis of Accounting (OCBOA)
(3) IFRS
(4) IFRS for Small and Medium-sized Entities (SMEs)

Question 3

Identify the types of entities that are not eligible to use IFRS for SMEs.

Answer 3

(1) Entities that are required to file financial statements with a regulatory body (e.g., SEC) for the purpose of issuing securities in a public market; or
(2) Entities that hold assets in a fiduciary capacity for a broad group of outsiders (e.g., banks, insurance companies, pension funds, etc).