Remember Captain Hook from Peter Pan? Mister Smee was Hook's right-hand man and a rather humorous and good-natured pirate (as pirates go).
Can the new IFRS for SMEs (small-medium enterprise edition) be your “right-hand man?”
Standing at only 238 pages (yep, that is the full set of standards), SME could be the answer to your standards overload. It is also part of acceptable GAAP standards since recognition of the International Accounting Standards Board by the AICPA in our Code of Professional Conduct in May 2008. This means that IFRS for SMEs can be used for private companies as GAAP without having to use OCBOA or make exceptions in your reports.
This was all part of Judy O'Dell's update at a recent MACPA town hall meeting in Towson. Judy appeared as a guest speaker and gave our members an update on the latest developments in private company financial reporting. She should know since she chairs the FASB's PCFRC (Private Company Financial Reporting Committee).
Here is a copy of her presentation.
Judy said IFRS for SMEs is growing in acceptance with the recent announcement of the United Kingdom adopting it for its private company reporting. Canada has taken the approach of maintaining Canadian GAAP for its private companies (as Canadian public companies must use full IFRS starting in 2011). The United States continues to be a question mark with regards to private companies.
Judy talked about the pros and cons. One thing I really liked is that SME will remain stable for two years so that private companies do not have to worry about major changes coming at them until those anniversary dates. She also said the best way to evaluate whether IFRS for SMEs is a viable option is to look at the Basis for Conclusions document in the IASB website (registration required).
You can download the full SME and illustrative financial statements or order the documents in booklet form from the IASB Web site. The AICPA also has a full resource center on IFRS at their Web site, IFRS.com. The MACPA also maintains an IFRS resource center as part of our town hall resources.
Judy was instrumental in attempting to modify many of the latest FASB pronouncements to fit the needs of U.S. privately held companies. Notably, she helped delay implementation of FIN 48 and other recent complex and costly standards, which are almost irrelevant for U.S. private company financial reporting. (The MACPA led the comments to exempt private companies from FIN 48 last year.) She is also one of the Top 100 Most Influential People in Accounting (for a third year) and an MACPA member. Needless to say, we are very proud of her.
Don't miss our upcoming programs on accounting- and audit-related issues. Check out our online catalog for upcoming programs.
Also, check out prior posts about IFRS here and these upcoming programs about IFRS:
- Nov. 11: IFRS for Small- and Medium-Sized Entities
- Dec. 17: The Impact of IFRS and Other Global Standards on Private Entities
- Dec. 18: International versus U.S. Accounting: What in the World is the Difference?
Tell us what you think: Should there be one set of global financial reporting standards? Should we have separate standards for private companies and public companies?
Listen to interview with Judy O'Dell form our own Bill Sheridan Interviuew with Judy O'Dell FASB PCFRC