IFRS for SMEs

Question 1

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

Answer 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

Entities that hold assets in a fiduciary capacity for a broad group of outsiders (e.g., banks, insurance companies, pension funds, etc.).

Question 2

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

Answer 2

More relevant standards;
Less complicated and voluminous standards;
Less costly standards to implement;
Less frequent changes in standards.

Question 3

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

Answer 3

Depending on the entity, the following types of generally accepted accounting principles may be used:
U.S. Generally Accepted Accounting Principles (GAAP);
U.S. Other Comprehensive Basis of Accounting (OCBOA);
International Financial Reporting Standards (IFRS);
IFRS for Small and Medium-sized Entities (SMEs).