Presentation by Robin Jarvis, Member, International Accounting Standards Board (IASB) SME Implementation Group, IFAC SMP Forum, March 2012

1. Shaping Regulation and
Standards to Suit SMEs and
SMPs
Professor Robin Jarvis
IASB Implementation Group
IFAC SMP Forum
Singapore
19 March 2012
Page 1 | Confidential and Proprietary Information

2. Developing Financial Reporting Standards for
SMEs
How Financial Reporting Standards have been developed:
• In the Past – using IFRS for SMEs as the example
• Future issues: what have we learnt for the future
development of financial reporting standards
• Conclusion
Page 2 | Confidential and Proprietary Information

3. IFRS for SMEs Published in July 2009: Rationale
Rationale for the introduction of IFRS for SMEs
• Many countries were using for SME financial reporting the
full IFRS
• Cross border trading activities
230 pages (full IFRSs are 3,000+)
Simplified IFRSs but built on an IFRS foundation.
Page 3 | Confidential and Proprietary Information

4. IFRS for SMEs : Simplification, Adopters and
Implementation and Review
Simplifications based on:
• User needs for information about short-term cash
flows, liquidity, and solvency (rather than longer term
forecasts of earnings and share prices)
• Costs and SME capabilities (50 employees)
• Completely stand-alone
Over 70 countries have adopted or announced plans to do so
Implementation Group and the 2012 Review
... Page 4 | Confidential and Proprietary Information

5. Financial Reporting for SMEs: the issues (1)
• Do we really know the users and their needs?
• Can a top down approach capture the needs of SMEs and
their Users?
• How is other information is used with financial reports in
decision making – e.g. the trade credit decision?
• Costs and benefits: Impact assessments
Page 5 | Confidential and Proprietary Information

6. Financial Reporting for SMEs: the issues (2)
• Regulatory Impact assessment
• Politics: ‘The IASB is a private members club’
• Is there a case for differentiating financial reports with the
‘definition’ of SMEs e.g. micro, small and medium?
Page 6 | Confidential and Proprietary Information

7. Conclusion – the future
• Regulatory burden / simplification: the demise of financial
reporting for micros and small companies?
• Will there be another chance to develop global SME
financial reporting standards?
• What can we do to improve the current standards?
• Developing a micro entity global financial reporting
standard?
Page 7 | Confidential and Proprietary Information

8. Thank-you
www.ifac.org/smp
Page 8 | Confidential and Proprietary Information