The latest version is the third edition of the IFRS for SMEs Accounting Standard, issued by the IASB on 27 February 2025. This 2025 edition, which replaces the 2015 version, is effective for annual periods beginning on or after 1 January 2027, with early application permitted.
IFRS for SMEs Accounting Standard Third Edition (2025) The third edition of the IFRS for SMEs® Accounting Standard, issued in February 2025 and effective from January 2027, brings several key amendments compared to the second edition issued in 2015.
The third edition of the IFRS for SMEs Accounting Standard issued in February 2025 amended and revised sections of the IFRS for SMEs Accounting Standard. An entity shall apply the amended and revised sections for annual periods beginning on or after 1 January 2027.
This third edition, effective from 1 January 2027 (with early application allowed), is the result of a comprehensive multi-year review aimed at keeping SME reporting relevant while maintaining its simplicity.
Unlike IFRS 19, which is a disclosure-only Standard, the IFRS for SMEs Accounting Standard is a stand-alone Standard that includes recognition, measurement, presentation and disclosure requirements.
In April 2024, the IASB issued IFRS 18 Presentation and Disclosure in Financial Statements. IFRS 18 sets out overall requirements for the presentation and disclosure in financial statements. The IASB did not reconsider all aspects of IAS 1 when developing IFRS 18, but instead focused on the statement of profit or loss.
IFRS allows for the recognition of internally generated intangible assets where certain conditions are met. IFRS for SMEs does not allow for the recognition of these intangible assets. Borrowing costs under IFRS for SMEs are expensed as opposed to IFRS which requires them to be capitalised where applicable.
All entities apart from public companies, state- owned companies and certain non-profit companies are allowed to apply the IFRS for SMEs. Profit companies, other than state owned or public companies, whose public interest score for the particular financial year is at least 350.
Accounting Standards Update (ASU) 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets For Private Companies and Certain Not-For-Profit Entities (PCC), issued on July 30, 2025 is an important change to the current expected credit loss (CECL) ...
In this PFRS for SMEs, many of the principles in full Philippine Financial Reporting Standards (PFRS) for recognizing and measuring assets, liabilities, income and expenses have been simplified, topics that are not relevant to small and medium entities (SMEs) have been omitted, and the required disclosures have been ...
Is an entity preparing financial statements in terms of the IFRS for SMEs Standard required to apply IFRS 9, IFRS 15 and IFRS 16? No. IFRS 9, IFRS 15 and IFRS 16 which became effective during 2018 and 2019 are applicable to entities applying IFRS.
In January 2023, IFRS 17 became the new international accounting standard for insurance contracts, replacing the previous interim standard, IFRS 4. The objective of this transition is to enhance reliability and transparency in financial statements and reduce methodological differences through harmonization.
IFRS 18 replaces IAS 1 and responds to investors' demand for better information about companies' financial performance. New requirements include: new categories and subtotals in the statement of profit or loss, disclosure of MPMs and enhanced requirements for grouping information.
IFRS 3 defines fair value (consistently with IFRS 13) but does not provide detailed guidance on the valuation methodology and instead refers to IFRS 13 for valuation models and techniques. IFRS 3 does however include limited guidance on some specific situations. and liabilities, such as a business.
The four pillars of IFRS S1 and S2 are governance, strategy, risk management and metrics and targets.
In April 2024, the International Accounting Standards Board (IASB) issued IFRS 18 – Presentation and Disclosure in Financial Statements. IFRS 18 replaces IAS 1 – Presentation of Financial Statements.
IAS 39 is no longer effective for most entities. It was replaced by IFRS 9 Financial Instruments from 1 January 2018, which introduced new rules for classification, measurement, impairment, and hedge accounting.
The IASB has determined that any entity that does not have public accountability may use the IFRS for SMEs Accounting Standard.
PFRS for SMEs No. 28 Valuation is also an accounting valuation that is used to determine the recognized cost of employee benefits in the financial statements, but it is specifically designed for small and medium-sized entities in the Philippines. It is governed by PFRS for SMEs No.
A subsidiary that is part of a consolidated group that uses full IFRSs is not prohibited from using the IFRS for SMEs in its individual financial statements, provided that the subsidiary itself does not have public accountability.
IFRS 4 was issued in March 2004 and applies to annual periods beginning on or after 1 January 2005. IFRS 4 will be replaced by IFRS 17 as of 1 Janaury 2023.
IFRS 18 also provides enhanced guidance for aggregation and disaggregation of information in the financial statements, introduces new disclosure requirements for management-defined performance measures (MPMs)* and eliminates classification options for interest and dividends in the statement of cash flows.
IFRS 17 – Insurance contracts entered into force on 1 January 2023. The new standard aims to increase transparency and to reduce differences in the accounting for insurance contracts and it replaces IFRS 4 (interim standard).