Accounting Standards for SMEs

At least 35 countries around the world have indicated they will use international accounting rules for smaller businesses within three years. This number is from a straw poll conducted during a meeting of standards setters in September 2009. The International Accounting Standards Board (IASB) issued what is commonly referred to as IFRS for SMEs in July 2009. IFRS for SMEs is a result of the IASB’s seven-year project to produce a consistent set of accounting rules for small and medium-sized entities. SMEs make up 99% of the world’s unlisted companies.

The countries, many from developing and emerging economies, have indicated they will either require or permit the use of the international financial reporting standards (IFRS) for small and medium-sized businesses (SMEs) by 2013.

Now the AICPA, the Financial Accounting Foundation (FAF), and the National Association of State Boards of Accountancy (NASBA) have formed a “Blue-Ribbon Panel” to address accounting standards for private companies. According to the U.S. Census Bureau, there are 29 million privately held companies in the U.S. Many are small- and medium-sized organizations that report to a narrower range of financial statement users, such as lenders, venture capitalists, and insurers.

The chairman of the panel has been picked and the rest of the panel is supposed to be selected this month.

So here’s the question. Do you think a different set of accounting standards is needed for small-and medium-sized organizations?

Tell us how you think by adding a comment.

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