In February 2007, the International Accounting Standing Board ( IASB) published for comment an exposure draft of a proposed International Financial Reporting Standard (IFRS) for...

In February 2007, the International Accounting Standing Board ( IASB) published for comment an exposure draft of a proposed International Financial Reporting Standard (IFRS) for small and Medium Enterprises( SMEs).

Required:
i) Outline three benefits that SMEs will derive from adopting IFRS.
ii) Highlight three challenges that could face SMEs in complying with IFRS.

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1. Benefits of IFRs for SMEs
- Improved access to capital.
- Improved quality and comparability or reporting.
- Facilitates cross-border trading.
- Focus on the needs of users of SME financial statement.
- Audit efficiencies.
- Stability - initial 2 year comprehensive review followed by 3-year omnibus updates.
- Eases burden where full IFRS has previously been required.
- Stepping stone to full IFRS for private entities aiming for initial offering (IPO).

2. Challenges facing implementation of IFRS
- Learning new technologies and accounting techniques.
- Making changes to information systems and accounting software may be needed.
- Collecting additional data for some transactions
- Dealing with new concepts.
- Dealing with valuation issues

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Wilfykil answered the question on February 13, 2019 at 07:02

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