The Impact of IFRS for SMEs on UK companies - Essay Example

Extract of sample
The Impact of IFRS for SMEs on UK companies

All of these entities have the option to adopt corresponding accounting tiered reporting framework under a certain purpose (Baker and Wallage, 2000). For instance in the United Kingdom (UK), publicly accountable entities are required to adopt full international financial reporting standard (IFRS) while those non-publicly accountable entities are required to use IFRS for SMEs. On the other hand, small companies are required to adopt financial reporting standard for smaller entities (FRSSE). However, these different entities have the option to adopt whatever reporting framework they need or most suited to their individual system (Jermakowicz et al., 2006). For instance, in the UK, small companies may have the opportunity to either apply full IFRS or IFRS for SMEs. Small company is defined as having less 250 employees and there are 571 listed of them in the UK in 2010 (Andrews, 2010). Financial reporting standards such as IFRS are designed especially in advanced economies (Tyrrall et al., 2007). In line with this, there is a strong link between economic system and financial reporting standards. In the UK, it is without question that organisations may eventually adopt it due to complexity of their business operations. ...Show more

Summary

The impact of IFRS for SMEs on UK companies Introduction Background of the study Large and small and medium enterprises (SMEs) vary in size because of their nature and coverage of business. SMEs are defined as non-public entities that are capable of publishing general purpose financial statements for external users (Organization for Economic Co-operation Development, 2008)…
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