When you run a small business in Canada, efficient record keeping and information exchange requires uniform guidelines for handling financial reporting. That’s the thinking behind International Financial Reporting Standards.
What Is IRFS?
IRFS provides a set of accounting standards developed by the International Accounting Standards Board. These standards offer companies around the world guidance on how to prepare their financial statements. Businesses in more than 100 countries use IFRS, including Canada and the European Union, and publicly traded companies in these countries must also follow the standards.
What Is IFRS All About?
The IFRS Foundation is an international organization that develops the IFRS global accounting standards. The organization’s mission aims for transparency, accountability, and efficiency in Canada’s and the world’s financial markets. It also fosters trust and financial stability in the global economy.
The IFRS for SMEs Standard
Your Canadian small business can use a less complex version of the IFRS, known as the IFRS for SMEs, which provides small- and medium-size companies with guidelines on financial reporting. This version of the IFRS contains topics relevant only to small- and medium-size companies. These standards serve creditors, lenders, people who use financial statements of small- and medium-size businesses, and finance-related professionals who need information about cash flows, solvency, and liquidity. The standards take into account the costs and capabilities of SMEs to prepare financial information. You have fewer mandatory disclosures under this set of standards, and the language and terms prove easy to understand. The organization revises these standards less frequently than the full IFRS.
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