IFRS Foundation Updates Accounting Standards for SMEs, Simplifying Reporting and Disclosure
The IFRS Foundation has released the updated supporting materials for the IFRS for SMEs Accounting Standard, designed to streamline financial reporting for small and medium-sized enterprises, which account for over 95% of global companies.
The revised standard removes topics less relevant to SMEs, including earnings per share, interim financial reporting, and segment reporting. Asset, liability, income, and expense recognition and measurement processes are simplified relative to full IFRS, while key provisions now include:
Goodwill amortisation applied systematically;
Immediate expense recognition for borrowing and development costs;
Cost model option for associates and joint ventures;
Exemptions where compliance would impose undue cost or effort.
Disclosure requirements are reduced by approximately 90%, and the standard is written in clear, accessible language to facilitate global translation and adoption. Updates are scheduled every three years to minimise adaptation burden for SMEs.
Importantly, jurisdictions can adopt IFRS for SMEs independently of full IFRS, deciding which entities may apply the standard. Its use is generally restricted to entities without public accountability. Each module in the supporting materials provides practical examples, knowledge checks, and comparisons to full IFRS, making implementation more intuitive.
This initiative reflects IFRS’s ongoing commitment to making high-quality financial reporting practical for smaller enterprises worldwide, providing clarity and efficiency while supporting consistent, internationally comparable accounting practices.
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