A highlight of the differences

WHY SEPARATE STANDARD FOR

SMEs?
Differences in the types and needs of

users of SMEs financial statements

Significant cost of applying full IFRS
IFRS for SMEs:

is a stand-alone document
is developed from full IFRS
is a simplification of full IFRS

Basic Features of IFRS for

SMEs
Good financial reporting made simple
Simplified IFRSs but built on full IFRS

foundation
Much smaller, 230 pages vs 2,855 pages
in full IFRSS
Designed specifically for SMEs
Internationally recognized
Organized by topic

SIMPLIFICATIONS MADE TO FULL

IFRS
Omission of some topics in IFRS if

irrelevant to private entities

Where IFRSs have options, include only
simpler options
Simplified recognition and measurement
principles
Simplified and reduced disclosures
Full IFRSs more than 3,000 items in
disclosure checklist
IFRS for SMEs roughly 300 disclosures
4

Borrowing Costs
Section 25

IAS 23

All borrowing costs are

Borrowing costs incurred

recognized as expense
when incurred

in connection with the

construction or
production of a qualifying
asset are capitalized as
part of the cost of the
asset

Employee Benefits
Section 28

IAS 19

Expected rate of return is

Settlement rate and not

used to determine the

amount of expected return
on plan asset
Actuarial gains or losses are
recognized immediately in
either profit or loss or other
comprehensive income.
Projected unit credit method
is used to measure defined
benefit obligation and the
related expense only if it is
possible to do so without
undue cost or effort.

expected rate of return is

used to determine the
amount of interest income
Actuarial gains or losses are

recognized immediately
in other comprehensive
income
Projected unit credit

method is required

Investment Property
Section 16

IAS 40

Investment property shall be

Investment property may

measured at fair value through

profit or loss if the fair value
can be measured reliably
without undue cost or effort.
Otherwise, the investment
property shall be accounted for
as property, plant and
equipment using the costdepreciation-impairment
model.
IFRS for SMEs does not require
disclosure of the fair value of
investment property carried at
cost.

be accounted for using:

Fair value model; or
Cost-depreciation- impairment

model

Full IFRS requires disclosure

of the fair value of

investment property.

Property, plant and

equipment
Section 17
IAS 16
Scope of Section 17 includes:
Investment property whose
fair value can not be
measured reliably without
undue costs or effort; and
Non-current assets held for
sale
Property, plant and equipment

are measured at cost less

accumulated depreciation and
accumulated impairment
losses.
Revaluation is not permitted

IAS 16 applies only to

Property, plant and equipment

Investment property is covered

by IAS 40
Non-current asset held for sale
is covered by IFRS 5

Property, plant and equipment

can be measured using:

Cost-depreciation-impairment

model; or
Revaluation model

Property, plant and

equipment
Section 17
IAS 16
Review of PPEs useful life,

residual value, depreciation

rate is made only if there is
a significant change in the
asset or how it is used

Requires annual review of

PPEs useful life, residual

value, depreciation rate

Intangible Assets
Section 18

IAS 38

All costs incurred to internally

Research costs are recognized

develop intangible assets such

as research and development
costs are charged to expense
Intangible assets must be
measured using costamortization-impairment model
Revaluation of intangible asset is

not permitted

All intangible assets are

considered to have a finite life. If

unable to estimate the useful
life of an intangible asset, the
life is presumed to be 10 years

as expense when incurred

while developmental costs
may be capitalized as part of
cost of an intangible asset
Intangible asset may be
accounted for using:
Cost-amortization-impairment

model; or
Revaluation model

Intangible asset with

indefinite life is not amortized

Intangible Assets
Section 18

IAS 38

Amortization periods and

Amortization periods and

methods, and the residual

value of intangible assets
shall be reviewed only if
there is a significant
change in the asset or how
an intangible asset is used.

methods, and the residual

value of intangible assets
must be reviewed at each
reporting period.
Directly attributable costs

Directly attributable costs

related to business
combinations are included
as part of the cost of the
business combination.

related to business
combinations are
recognized as expense.

Investment in Associates
Section 14

IAS 28

Investment in associates

Investment in associates

shall be accounted for

using:
Equity model;
Fair value model; or
Cost model

must be accounted for

using the equity method

Investment in Joint
Ventures
Section 15
IAS 31
Investment in joint

ventures shall be
accounted for using:
Equity model;
Fair value model; or
Cost model

Investment in joint

ventures must be
accounted for using the
equity method

Leases
Section 20

IAS 17

Lease payments under

Lease payments under

operating leases shall be

recognized as
income/expense on a
straight-line basis unless
Another basis is more

representative of the timing

of the benefits obtained by
the user of the asset; or
the payments are
structured to increase in
line with expected general
inflation.

operating leases shall be

recognized as
income/expense on a
straight-line basis unless
Another basis is more

representative of the timing

of the benefits obtained by
the user of the asset

Foreign Currency
Translation
Section 30
IAS 21
When a foreign operation is

disposed of, any cumulative

amount in equity is recognised
in comprehensive income not
in profit or loss

When a foreign operation is

disposed of, any cumulative

amount in equity is recognised
in profit or loss

Basic Financial
Instruments
Section 11
IAS 39/ IFRS 9
Debt instruments are

measured at amortised cost

Debt instruments that are
classified as current are
measured at the
undiscounted amount
Investments in nonconvertible preference
shares and non-puttable
ordinary or preference
shares are measured at

fair value through profit

or loss

Financial assets are classified

as either
FVTPL;
FVTOCI
Amortized cost

Complete Set of Financial

Statements
IFRS for SMEs
Full IFRS
Complete set of FS includes:
Statement of Financial Position
Statement of Income
Statement of Cash Flows
Statement of Changes in Equity
Statement of Comprehensive

Income
Notes to Financial Statements
Statement of income and retained
earnings may be presented in
place of Statement of changes in
equity and Statement of
comprehensive income

Complete set of FS includes:

Statement of Financial

Position
Statement of Income
Statement of Cash Flows
Statement of Changes in
Equity
Statement of
Comprehensive income
Notes to Financial
Statements

Rich Text Format

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