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IFRS For SMEs - Coggle Diagram
IFRS For SMEs
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Financial instruments
all basic financial instruments are measured at amortised cost using the effective interest method except for
investments in non-convertible and non-puttable ordinary and preference shares that are publicly traded or whose fair value can otherwise be measured reliably are measured at fair value through profit or loss
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IFRS Standards
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However, vast majority of the world's companies are small and privately owned
So, it could be argued that IFRS Standards are not relevant to their needs or to the needs of their users
It is often thought that small business managers perceive the cost of compliance with accounting standards to be greater than their benefit.
simplifications to the recognition, measurement and disclosure requirements
goodwill and other indefinite-life intangibles are amortised over their useful lives, but if useful life cannot be reliably estimated, then 10 years
a simplified calculation is allowed if measurement of defined benefit pension plan obligations (under the projected unit credit method) involves undue cost or effort
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The principal aim
to provide a framework that generates relevant, reliable and useful information
which should provide a high quality and understandable set of accounting standards suitable for SMEs.
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