What significance does the issuance of IFRS for SMEs have in the United States?
U.S. private companies are not “required,” like public companies, to use a particular basis of accounting when preparing their financial statements. The factors that drive a private company’s choice of which financial accounting and reporting framework to follow in preparing its financial statements depend upon each company’s objectives and the needs of their financial statement users. Currently, private companies in the United States can prepare their financial statements in accordance with U.S. GAAP as promulgated by the Financial Accounting Standards Board (“FASB”); an other comprehensive basis of accounting (“OCBOA”), such as cash- or tax-basis; or full IFRS, among others. Now, with the issuance of IFRS for SMEs, U.S. private companies have an additional option.
