3 Steps to IFRS Conversion for Small and Medium Entities

by Judith M. Myerson, President/Owner (January 2010)

Follow this process to help you analyze business impacts and identify, prioritize, and monitor risks if you are a small (fewer than 100 employees) or medium-sized (100 to 500 employees) company converting to International Financial Reporting Standards.

Categories: Compliance, IFRS

Key Concept

International Financial Reporting Standards (IFRS) for small and medium-sized entities (SMEs) is a simplified version of the full IFRS regulation. Many accounting topics pertaining to public companies were eliminated in this version. If an SME later becomes a publicly listed entity, it will need to convert from IFRS for SMEs to full IFRS.

International Financial Reporting Standards (IFRS) for small and medium-sized entities (SMEs) is a simplified version of full IFRS. In creating IFRS for SMEs, the International Accounting Standards Board (IASB) eliminated many accounting topics that are not generally relevant to private companies (for example, earnings per share and segment reporting).

In preparation for the conversion to IFRS, it’s important that US companies understand how the conversion will affect them. I’ll take you through a three-step process that explains how an SME should handle its conversion to IFRS, keeping in mind these and other differences. Before I delve into that, I’ll explain a few basics about US Generally Accepted Accounting Principles (US GAAP) and IFRS for SMEs.

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