Brussels, 18/11/2009 (Agence Europe) -The European Commission has opened a public consultation on the draft new International Financial Reporting Standard (IFRS) for small and medium-sized enterprises (SMEs) not quoted on the stock exchange, that the International Accounting Standards Board (IASB) published in the summer. The consultation will run until 12 March 2010, and will involve users of companies' accounts like banks, investors and accountants. It is part of the overhaul of EU accountancy rules (Directives 78/660/EEC and 83/349/EEC on annual and consolidated accounts) for privately owned companies (not quoted on the stock exchange).
The EU legislation allows Member States, as they see fit, to apply the IFRS to companies not quoted on the stock exchange, but the Commission has found that relatively few companies voluntarily choose to use the IFRS in countries where this is possible and few Member States have made the use of IFRS compulsory for companies not quoted on the stock exchange. The Commission is asking whether it would be a good idea to introduce the IFRS for small business and if so, whether this should take the form of giving Member States the option of applying it under existing accountancy directives or whether small businesses should be given the option directly. The Commission also wants to brainstorm interested parties about the way that publishing the IFRS for small business would provide an opportunity for some organisations to simplify EU accountancy rules by basing them on certain fundamental principles.
The IFRS for small and medium-sized companies comprises 35 chapters on fundamental principles; financial information to be submitted (like annual accounts, profit or loss, statements about treasury flows, etc); a guide explaining how certain operations are to be listed in the accounts (like intermediate reports). Depending on the transaction, the IFRS in question allows valuation using historic costs (for real estate, for example) or fair value (like complex financial instruments), with the option in some cases of choosing between the two. (M.B. trans fl)