SAICA makes it simple for micro entities

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The South African Institute of Chartered Accountants (SAICA) has launched an electronic guide for applying the International Financial Reporting Standard (IFRS) for SMEs for micro entities. 

Using the guide will improve an SMEs’ understanding of how to apply the standard by focusing on the most applicable policies to their business. The guide is designed to help sole proprietorships, partnerships, close corporations and companies with a public interest score, as determined in terms of the Companies Act,  below 100 points (although it may also be useful for companies with a public interest score of between 100 and 350 points). 

The guide comes in the form of an easy-to-use electronic toolkit – with a user checklist, an application guide with practical examples, illustrative financial statements, live updates and a disclosure checklist. The electronic platform allows SMEs to easily navigate the guide by using an in-built search function. 
The benefits of using the guide are clear. The toolkit: 

  • Applies a textbook approach and includes case studies
  • Is a robust and stable reporting framework 
  • Uses IFRS for SMEs, which is accepted in South Africa and internationally 
  • Enables businesses’ accounts to be audited or independently reviewed 

South Africa was the first country in the world to adopt the Exposure Draft on IFRS for SMEs for use by local companies in 2007. At the time, the intention of the early adoption of the standard was to provide immediate relief for limited interest companies under the Corporate Laws Amendment Act. 

SAICA’s Financial Reporting Project Director Sue Ludolph says, “SAICA provided significant feedback to the International Accounting Standards Board (IASB) in 2007, helping shape the final IFRS for SMEs standard.”

‘The toolkit, is a form of application guidance specifically designed to assist micro entities comply with IFRS for SMEs, is also a first for South Africa,” says Ludolph. “Our electronic guide is available not only to SAICA members, but to everyone involved in preparing financial statements for micro entities.” 

The IASB has just recently announced their intention to take IFRS for SMEs and cut out the sections not applicable to a typical micro entity and issue this as a guide on how to use the IFRS for SMEs for a micro entity. They will be looking at what SAICA has done to assist them. This has vindicated SAICA’s solution and again shows that South Africa is a world leader. 

“SAICA will continue to take a leadership role in the international financial reporting standards.” 

SAICA will soon be conducting seminars across South Africa on how to apply IFRS for SMEs. For more information please contact seminars@saica.co.za  or visit www.saica.co.za 
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Issue 72