The Project of the IASB for Small and Medium-Sized Entities

Abstract

The IASB issued a discussion paper in 2004 containing primary views on accounting standards for small and medium-sized entities.⁸³ The intention of the IASB is to develop accounting standards which are suitable for entities that do not have public accountability and publish general-purpose financial statements for external users. This group of entities are referred to as Small and Medium-Sized Entities (SMEs). This definition may be misleading because public accountability of an entity is defined by referring to a filing of financial statements with the securities commission or other regulatory organisation for the purpose of issuing any class of instruments in a public market. SMEs are not defined in financial figures, for instance sales, number of employees or total balance sheet amounts. So it may be the case hat large, globally operating, privately held companies with thousands of employees are treated as SMEs as well as very small private companies with only local business activities, low sales figures and only a few employees.