The IASB issued an update to the accounting standard “IFRS for Small and Medium Enterprises”

In February 2025, the International Accounting Standards Board (IASB) issued a major, third update to the Accounting Standard “IFRS for Small and Medium Enterprises” (hereinafter – SMEs). This standard was first issued in 2009 in response to the global demand for a simplified accounting standard for SMEs.

The Standard defines SMEs as entities without public accountability that prepare general purpose financial statements. This Standard aims to balance the information needs of lenders and other users of SMEs’ financial statements with the resources available to SMEs. The accounting standard “IFRS for SMEs” differs from the full set of accounting standards under IFRS in a number of simplifications:

•  it omits issues that are not relevant to typical SMEs;
• some accounting policy options in the full scope of IFRS are not allowed as a simplified method is available for SMEs;
• many of the principles of recognition and measurement that are fully formalized in the accounting standards of IFRS have been simplified;
• significantly less information disclosure is required;
• the text is written in a simplified form for easier understanding and translation.

Updating the accounting standard “IFRS for SMEs” will improve the information provided to users of financial statements while maintaining the simplicity of the standard.

The main highlights include:

• a revised model for revenue recognition;
• bringing together the requirements for fair value measurement in a single location;
• updating the requirements for business combinations, consolidations and financial instruments.

This update is effective for annual periods beginning on or after January 1, 2027, with early application permitted, or  entities can continue applying the previous version issued in 2015 but till the effective date of the new version.

The third edition of the standard for SMEs is already available on the official website of the IFRS Foundation for registered users.

For reference: Currently, the legislation does not provide for the application of “IFRS for small and medium enterprises” in the Republic of Belarus. Nevertheless, this standard may be useful for private small and medium-sized enterprises in the Republic of Belarus when initiatively preparing financial statements for interested external users as it allows preparing high-quality and recognized financial statements at lower costs than when preparing full IFRS financial statements.

Our company’s specialists are ready to provide consulting services on the preparation of IFRS financial statements for small and medium enterprises. To receive more detailed information, clarify the cost of services or request a commercial offer, you can fill out the form on the website or send us an email to info@assurance.by.