Concepts and Persuasive Principles

Scope of this section


2.1 This section describes the objective of financial statements of small and medium-sized entities (SMEs) and the qualities that make the information in the financial statements of SMEs useful. It also sets out the concepts and basic principles underlying the financial statements of SMEs.

Objective of financial statements of small and medium-sized entities


2.2 The objective of financial statements of a small or medium-sized entity is to provide information about the financial position, performance and cash flows of the entity that is useful for economic decision-making by a broad range of users of the financial statements who are not in a position to demand reports tailored to meet their particular information needs.

2.3 Financial statements also … Read more

Small and Medium-sized Entities

Intended scope of this Standard


1.1 The IFRS for SMEs is intended for use by small and medium-sized entities (SMEs). This section describes the characteristics of SMEs.

Description of small and medium-sized entities


1.2 Small and medium-sized entities are entities that:
(a) do not have public accountability; and
(b) publish general purpose financial statements for external users.
Examples of external users include owners who are not involved in managing the business, existing and potential creditors, and credit rating agencies.

1.3 An entity has public accountability if:
(a) its debt or equity instruments are traded in a public market or it is in the process of issuing such instruments for trading in a public market (a domestic or foreign stock exchange … Read more

SME – Inventories

The principles for recognising and measuring inventories are included in here. Inventories are assets:

  1. held for sale in the ordinary course of business;
  2. in the process of production for such sale; or
  3. in the form of materials or supplies to be consumed in the production process or in the rendering of services.

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Accounting Policies, Estimates and Errors

This is about guidance for selecting and applying the accounting policies used in preparing financial statements. As a result it also covers changes in accounting estimates and corrections of errors in prior period financial statements.

Selection and application of accounting policies

Accounting policies are the specific principles, bases, conventions, rules and practices applied by an entity in preparing and presenting financial statements.

If Accounting Policies, Estimates and Errors specifically addresses a transaction, other event or condition, an entity shall apply these specific parts of Accounting Policies, Estimates and Errors. However, the entity need not follow a requirement in Accounting Policies, Estimates and Errors if the effect of doing so would not be material.

Management’s judgment in

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SME – Intangible Assets other than Goodwill

Scope of this section


18.1 This section applies to accounting for all intangible assets other than goodwill (see Section 19 Business Combinations and Goodwill) and intangible assets held by an entity for sale in the ordinary course of business (see Section 13  Inventories and Section 23 Revenue).

18.2 An intangible asset is an identifiable non-monetary asset without physical substance. Such an asset is identifiable when:

  1. it is separable, ie capable of being separated or divided from the entity and sold, transferred, licensed, rented or exchanged, either individually or together with a related contract, asset or liability; or
  2. it arises from contractual or other legal rights, regardless of whether those rights are transferable or separable from the entity
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Property, Plant and Equipment

Property, Plant and Equipment (PPE)

PPE – Introduction

17.1 Property, Plant and Equipment applies to accounting for property, plant and equipment and accounting for investment property whose fair value cannot be measured reliably without undue cost or effort on an ongoing basis. Investment Property applies to investment property whose fair value can be measured reliably without undue cost or effort.

PPE –  Tangible assets

17.2 Property, plant and equipment are tangible assets that:

  1. are held for use in the production or supply of goods or services, for rental to others, or for administrative purposes; and
  2. are expected to be used during more than one period.

No Property, Plant and Equipment

17.3 Property, plant and equipment does not include:

  1. biological assets
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