Journal of Accounting and Management Information Systems (JAMIS)

Good news for Romanian companies: IFRS for Small and Medium-sized Enterprises (SMEs)!

Supp/2006 ,   p648..656


Keywords:   fair value, IFRS, small and medium-sized enterprises, evaluation

Even though IFRS were not designed specifically for listed companies, it is clear that the prime users are the capital markets. But the vast majority of the world's companies are small and privately owned, so some argued that IFRS are not relevant to SMEs. Users of SMEs' financial statements needs  information for a narrower range of decisions, as they have less complex transactions and therefore less need for the sophisticated analysis. Another important argument for separate SME accounting standards is the cost incurred by entities for presenting financial statements according to he full set of IFRS, which is much heavier for smaller firms and it is not justified on the basis of user needs. Further, IASB concluded that it is better to have a single set of accounting standards for SMEs instead of multiple national GAAPs, because of lack of comparability across national boundaries. As a result, IASB will publish soon a set of Accounting Standards for Small and Medium-sized Entities. Our article, being a literature review, but also a result of practical experience of Romanian companies, discusses the effect on adopting full IFRS in Romania and the impact which IFRS
for SMEs will have on Romanian companies. IFRS for SMEs is a relatively new and unknown issue for Romanian accounting literature, so the article also states the reasons and the actual stage of issuing separate SME accounting standards.