This publication sets out a realistic illustration of financial statements prepared in accordance with the IFRS for Small and Medium-sized Entities (IFRS for SMEs), along with extensive guidance notes to explain the underlying requirements and alternative disclosure and presentation approaches available.
Our objective in preparing the publication was to illustrate one possible approach to financial reporting by an entity engaging in transactions that are 'typical' across a range of non-specialist sectors. However, as with any example, this illustration does not envisage every possible transaction. Other approaches may be more appropriate in specific circumstances.
Australia is one of the few countries that has not adopted IFRS for SMEs as an alternative to the complex IFRS accounting standards that the International Accounting Standards board has stated are generally designed for listed companies.
Instead, the Australian Accounting Standards Board (AASB) has developed its own, uniquely Australian accounting standard: the Reduced Disclosure Regime (RDR) that uses the IFRS for SMEs financial statements disclosures as a base but adds additional disclosure requirement that the AASB believes are necessary. The RDR requires complete IFRS recognition and measurement requirements and the standard has, at this time, a 1 January 2013 application (i.e. June 2014 balancers).
Grant Thornton is hopeful that once the AASB completes its differential reporting research project due early in 2012, it will re-assess its decision to disallow IFRS for SMEs as an option for non-publicly accountable entities (i.e. mostly non-listeds), given that Australia is almost unique in requiring complex IFRS recognition and measurement requirements for non-listed entities.
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For further information, please contact Grant Thornton Australia's National Head of Professional Standards, Keith Reilly at email@example.com.