www.ifrs.org: “Our mission is to develop IFRS Standards that bring transparency, accountability and efficiency to financial markets around the world. Our work serves the public interest by fostering trust, growth and long-term financial stability in the global economy.”
- In South Africa IFRS Standards are required for domestic public companies.
- The IFRS for SMEs Standard is required or permitted.
- South Africa has adopted the IFRS for SMEs Standard without any modifications.
- No modifications to meet local conditions were made.
- All SMEs (entities without public accountability) that are required by the Companies Act regulations or choose to prepare general purpose financial statements are permitted to use the IFRS for SMEs Standard. Alternatively they may use full IFRS Standards.
- Those SMEs that are required to or choose to prepare general purpose financial statements but that do not use the IFRS for SMEs Standard must use full IFRS Standards. Additionally, the South African Companies Act establishes a public interest point system, and those SMEs that have a public interest score under 100 points and whose financial statements are internally compiled can use their own accounting policies if they are not required to comply with any other financial reporting standards.
- South Africa has also developed application guidance specifically designed to assist micro entities to apply IFRS for SMEs Standard.
- IFRS Standards are required for some foreign companies: primary listing is on the Johannesburg Stock Exchange (JSE). Home country GAAP or IFRS Standards are permitted if a company’s primary listing is outside South Africa, and its JSE listing is secondary.
The IFRS for SMEs Standard reflects five types of simplifications from full IFRS Standards:
- some topics in full IFRS Standards are omitted because they are not relevant to typical SMEs;
- some accounting policy options in full IFRS Standards are not allowed because a more simplified method is available to SMEs;
- many of the recognition and measurement principles that are in full IFRS Standards have been simplified;
- substantially fewer disclosures are required; and
- the text of full IFRS Standards has been redrafted in ‘plain English’ for easier understandability and translation.
Download a copy of the IFRS for SMEs here