UNCTAD-ISAR
Accounting and Financial Reporting
Guidelines for SMEs
The Exchange – World Bank
Amman, Jordan
18 June 2013
UNCTAD-ISAR -Accounting by SMEs
• Outline:
• Introduction to UNCTAD-ISAR
• Background to the work on Accounting
by SMEs
• Main features of the SMEGAs
• Follow-up work on the SMEGA Level 3
Introduction – UNCTAD-ISAR
• ISAR stands for - the Intergovernmental Working
Group of Experts on International Standards of
Accounting and Reporting.
• ECOSOC Resolution 1982/67
• To promote reliable and comparable corporate
reporting.
Introduction – UNCTAD-ISAR
continued…
• Serviced by the United Nations Conference on
Trade and Development (UNCTAD)
• Held 29 annual sessions so far.
• Close to 300 experts from about 90 countries
participate at the annual session of ISAR.
Importance of the SME Sector
• Employment;
• Essential goods and services;
• Export; and
• Tax base.
SMEs and Access to Finance
Source: Bank Financing for SMEs Around the World, Policy Research Working Paper 4785, World Bank,
November 2008.
Main obstacles for SME financing
Source: Bank Financing to Small and Medium-Sized Enterprises (SMEs) in Colombia, Policy Research Working
Paper 4481, World Bank, January 2008.
Background – Accounting by SMEs
• UNCTAD-ISAR Seventeenth Session - July 2000.
• Growing volume of International Accounting
Standards
• Need for simple, understandable and userfriendly accounting and reporting system
designed with SMEs in mind
• UNCTAD-ISAR Consultative Group on
Accounting by SMEs
Categorisation of SMEs
Source: Bank Financing to Small and Medium-Sized Enterprises (SMEs) in Colombia, Policy
Research Working Paper 4481, World Bank, January 2008.
Accounting by SMEs – the approach
• Diversity in categorization of SMEs
• Qualitative rather than quantitative
categorization.
Accounting by SMEs – the approach
Three-tiered approach:
• Public securities or significant public
interest;
• Significant business enterprises, no public
securities, no significant public interest;
and
• Smallest entities, owner managed, few
employees.
Accounting by SMEs – the approach…
Accounting and reporting requirements by
category:
• Full set of IFRS;
• A condensed set of requirements derived
from IAS; and
• Simple accruals-based accounting system.
Accounting by SMEs – the Guidance
IFRS
More than
3,000 pages
SMEGA Level 2
66 pages
SMEGA Level 3
16 pages
Follow-up activities – SMEGA Level 3
Updating SMEGA Level 3:
• Twenty-third session (October 2006) revision
of SMEGA Level 3 proposed
• Completed November 2008
• One of the main changes - an optional cash
flow statement .
Follow-up activities – SMEGA Level 3
• Training for SME owners and employees- in
cooperation with Empretec centers
• Research on the current state of accounting
and financial reporting needs of SMEs
For Further Information:
Please visit the ISAR website at:
http://www.unctad.org/isar
Link to ISAR publications on SMEGAs
http://unctad.org/en/Pages/DIAE/ISAR/Financial-Accounting-andReporting.aspx
Accounting and Financial Reporting
Guidelines for SMEs
Thank you.