Full IFRSs are generally designed for use by entities that are quoted on world’s major capital markets. However, the world’s majority entities are Small and Medium sized Enterprises (SMEs) and unlisted. The IASB has developed IFRSs specific to SMEs. The main purpose of this was to provide a framework that generates relevant, reliable and useful information which should provide a high quality and understandable set of accounting standards suitable for SMEs.

Required:

Describe FOUR major differences between accounting treatment under full IFRS and IFRS for SMEs.

Create FOUR scenarios simulating a particular SME where you describe transactions with numerical data as well as specified accounting periods. For each created scenario:

Discuss the required accounting treatment in accordance with IFRS for SMEs

Contrast the accounting treatment in (b) (i) with the treatment under Full IFRS.