Why did the IASB issue IFRS for SMEs?
IFRS for SMEs was issued to provide a version of IFRS that is less costly to implement than full IFRS and perhaps more relevant to the users of those financial statements. As described earlier, the standards provide simplified options that address the user needs of SME financial statements, which are generally focused on understanding an entity’s operating cash flows, working capital, and liquidity. This lower cost of implementation will benefit entities in developing countries that do not already have national GAAP. The standards were also developed to benefit entities in countries that already have national GAAP as an alternative to adopting full IFRS.
