What is IFRS for SMEs?
Published
IFRS for SMEs is a simplified version of IFRS designed for entities without public accountability (unlisted, not holding assets for a wide public such as banks and insurers). Issued by the IASB itself, and SOCPA-endorsed for application in the Kingdom to small and medium enterprises.
What it actually simplifies
- Size: a focused volume instead of thousands of pages of full IFRS plus interpretations.
- Fewer disclosures: the "required disclosures" list is much shorter - fitting those whose statements aren't read by hundreds.
- Simpler measurements: some complex options in full IFRS (the revaluation model for fixed assets, certain fair-value elections) are restricted or removed.
- Omitted or reduced topics: more complex financial instruments, segment reporting, EPS - inapplicable or simplified.
- Lighter treatments: goodwill is amortised (under the current version), deferred income tax is handled more simply, and so on.
Who it fits
An entity with no public accountability - not listed and not an intermediary holding public funds - falling inside the SME thresholds (see the SME page). In Saudi practice: the vast majority of private small and medium businesses.
What remains binding
Simplification doesn't touch core principles: accrual basis, the assets/liabilities/equity equation, revenue recognition on performance, prudence. The version is lighter in application, not lighter in principled compliance.
Frequently asked questions
Will my bank or investor accept statements built on it?
Most local parties know and accept it for SMEs. A foreign investor or a party planning a future listing may require full IFRS - a decision informed by growth direction, not just current state.
How do updates reach me?
The IASB issues periodic revisions, which SOCPA endorses after review. Follow through SOCPA's publications and site, and rely on an informed accountant.