Reporting For SMEs

Question 1

What is the standard concerning SMEs?

Answer 1

IFRS for SMEs

Question 2

What is the purpose of IFRS for SMEs?

Answer 2

Simpler and more relevant accounting option for smaller companies which omits irrelevant topics whilst maintaining similar principles to the main IFRS

Question 3

Which company qualifies for the IFRS for SMEs standards?

Answer 3

Small or medium sized company which does not have public accountability and published general purpose accounts for external users.

SME will be defined by the national regulator (Turnover, Balance Sheet, # of Staff)

Question 4

How is PPE treated differently under IFRS for SMEs?

Answer 4

Based on historical cost or revaluation model
Borrowing costs and R&D not capitalised
Revaluation of Intangibles not allowed
Intangible Assets have finite useful life
If can not be determined then assumed to be 10 years

Question 5

How are investment properties valued

Answer 5

Hold at fair value if can be reliably measured, otherwise value based on cost. If impaired raises case for justifying measurement, or fair value

Question 6

How are business acquisitions different?

Answer 6

Can include the transaction cost in value of the assets unlike in main standard where they can’t