KARACHI (July 10, 2009) – The International Accounting Standards Board’s (IASB) new standard for small and medium sized enterprises (SMEs) will have a significant impact on millions of companies around the world, says ACCA (the Association of Chartered Certified Accountants) in welcoming the announcement.
Despite concerns by many that the new simplified standard, which still runs to more than 200 pages would be too complex for small businesses to use, ACCA’s own research shows little concern in this area.
Richard Martin, Head of Financial Reporting at ACCA said: “We are delighted that the IASB has completed its most important project after five years’ work. It comes at a critical time, because it will mean that countries will be able to apply IFRS to companies of all sizes and not need to operate two systems of financial reporting, with one for large listed companies and another for smaller or unlisted privately owned companies. ACCA has always supported IFRS as a global accounting language for listed companies – now this has been opened up for smaller businesses too.
“The use of international standards across the board should add credibility to the financial statements of unlisted companies, at a time when potential users of accounts want to be able to rely on the figures they see,” he said.
“There has been concern from some quarters that despite attempting to simplify standards for SMEs the IASB had produced something which was still far too complex. However, when we field tested the exposure draft in the UK we found that small companies and their accountants were able to apply this without significant difficulty. We look forward to a widespread take up over the next few years as countries assess its usefulness in their context. ACCA is pleased that IASB as a global standard setter has recognised its obligation to make available the standard and related educational material to download for free to users,” added Richard Martin.
ACCA President Brendan Murtagh, who is a partner in an accounting practice, said: “In my practice we imagine this will be warmly accepted as best practice by our clients very quickly. A set of standards which is more easily understood by smaller businesses, their potential investors, customers and suppliers can only help organisations to survive in these tough trading conditions and to potentially thrive when the current situation eases.”