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IFRS for SMEs

In one sentenceA simplified version of International Financial Reporting Standards in a single standard, intended for businesses not listed on the capital market and without public accountability.

Simply put

Full international standards are long and complex, and many of their details do not concern a family business or a medium-sized establishment. So a shorter version was issued with simpler rules and fewer disclosures.

In the Kingdom, the Saudi Organization for Chartered and Professional Accountants (SOCPA) endorses international standards, and unlisted small and medium-sized businesses usually prepare their statements under this standard. One example of its simplifications is that goodwill is amortized over its useful life.

Example

An unlisted family trading establishment that borrows from the bank and submits its statements with its Zakat return prepares its statements under IFRS for SMEs, while a company listed on the capital market applies full IFRS.

Don't confuse it with

International Financial Reporting StandardsThe full standards are for listed businesses and those with public accountability, and the simplified version is for the rest.