IFRS for SMEs

Steve Collings

Hi All,

I have today published an article concerning the fresh debate about IFRS. Critics are calling for the whole framework to be repealed in the UK (though as you will see from the article, I don't believe this will happen).

IFRS for SMEs is proposed to come in for those of us who deal with SMEs and there is mention of a questionnaire which all accountants who deal with SME clients are encouraged to fill in to help the ASB decide how to go about this.

Happy reading!

Best wishes,
Steve

Rinske

Hi Steve,

Thank you for this article, it made for a very interesting read.

Gill Gittings

Steve thanks for this link. I work with a couple of clients on AIM and agree that these standards are sometimes extremely hard to work with.

I like your suggestion about doing away with the cash flow statement. Do you think they will listen? I hope so as my plan is to go self employed. I hate cash flow statements in study and would hats them even more in work.

Steve Collings

Gill Gittings wrote: »

I like your suggestion about doing away with the cash flow statement. Do you think they will listen? I hope so as my plan is to go self employed. I hate cash flow statements in study and would hats them even more in work.

Hi Gill,

I'm not entirely sure about how easy it would be to dispense with the cash flow statement (or statement of cash flows as it is referred to in INT terms). Under the IFRS regime the statement of cash flows is mandatory - it is also mandatory under the IFRS for SMEs.

When the UK adopted the International Standards on Auditing (ISAs) they tweaked them to be UK and Ireland specific (hence they are referred to as ISA (UK and Ireland)). They are also referred to as ISA 'pluses'. Whether the ASB do this with the IFRS for SMEs remains to be seen but I think the only way they could realistically get away from the statement of cash flows is by issuing a revised FRSSE based on IFRS for SMEs which 'very small' companies could adopt, as I have suggested in the article.

To keep the current version of FRSSE would seem absolutely pointless because it would be completely out of sync with the proposed GAAP and based on standards that will be defunct.

I wrote the article in response to the critics who have published an article in The Times calling for the coalition government to repeal the legal requirement to report under IFRS in this country on the grounds they believe the framework is 'flawed' (as reported in my article).

I am not convinced they will get their way in all fairness because they are basing the judgement primarily on the issue of fair value accounting - which has always been controversial. Most GAAPs have areas open to manipulation (our SSAP 21 'Hire Purchase and Leasing Contracts' does). Indeed I think the Accounting Standards Board also want rid of current UK GAAP on the grounds they believe it is 'over-complicated' (says a lot for their work considering they are the ones that issue the standards!) In addition the only standard that has been issued in the last five years is that of FRS 30 (Heritage Assets). So I suspect more dummies will be spat out when the ASB issue their exposure draft!

Time will tell....

Regards
Steve