1.

Accounting framework and first-time adoption (Sections
1, 2, 3 and 35)

PFRS for SMEs Full PFRS
Scope An entity that publishes general purpose PFRSs are developed and
financial statements for external users and does published to promote the
not have public accountability can use the IFRS use of those PFRSs in general
for SMEs. An entity has ‘public accountability’ purpose financial statements
if it files or is in the process of filing its financial and other financial reporting.
statements with a securities commission or PFRSs apply to all general
other regulatory organisation for the purpose purpose financial statements,
of issuing any class of instrument in a public which are directed towards the
market or if it holds assets in a fiduciary common information needs of
capacity for a broad group of outsiders. Banks, a wide range of users.
insurance companies, securities brokers and
dealers, and pension funds are examples of
entities that hold assets in a fiduciary capacity
for a broad group of outsiders.
Small listed entities are not included in the
scope of standard.
If a subsidiary of an PFRS entity uses the
recognition and measurement principles
according to full IFRS, it must provide the
disclosures required by full PFRS.

Definitions
Asset An asset is a resource controlled by an entity Same as PFRS for SMEs.
as a result of past events and from which future [PFRS Framework, paras 49(a),
economic benefits are expected to flow to the 53-59].
entity.
Future economic benefits can arise from
continuing use of the asset or from its disposal.
The following factors are not essential in
assessing the existence of an asset:
• Its physical substance.
• The right of ownership.
[PFRS for SMEs 2.15(a), 2.17-2.19]

Liability A liability is a present obligation of an entity Same as PFRS for SMEs.
arising from past events, the settlement of
which is expected to result in an outflow from
the entity of resources embodying economic
benefits.
The present obligation can be either a legal or
constructive obligation (based on established
pattern of past practice or a creation of valid
expectations).
[PFRS for SMEs 2.15(b), 2.20-2.21]

Equity Refer to chapter 7: Non-financial liabilities and Refer to chapter 7:
equity. Non-financial liabilities and
equity.

Income Refer to chapter 4: Income and expenses. Refer to chapter 4: Income
and expenses.

Expenses Refer to chapter 4: Income and expenses. Refer to chapter 4: Income
and expenses.

.

a d o p t i o PFRS for SMEs Full PFRS n Recognitio n Recognition is the process of incorporating in Same as IFRS for SMEs. An item that fails to meet the recognition criteria 1 . regard needs to elements of that meets the definition of an element and be given to the materiality - the ti financial satisfies the following criteria: considerations. A c c o u n t i Measureme n nt I tems are usually accounted for at their The measurement bases g may qualify for recognition at a later date as a result of subsequent circumstances or events. . In of the the balance sheet or income statement an item addition. an • The item has a cost or a value that can be d measured reliably. m statements • It is probable that any future economic e fi rs benefit associated with the item will flow to t or from the entity. f r a m e w o r A failure to recognise an item that satisfies k these criteria is not rectified by disclosure of accounting policies used or by notes or explanatory materials.

In extremely rare circumstances. Offsetting assets and liabilities or income and expenses is not permitted unless it is required or permitted by individual sections in the IFRS for SMEs. 3. financial statements.Concepts and pervasive principles bases historical cost. However. 1. investments in associates current cost. 2. Materiality is a sub- timeliness and achieving a balance between characteristic of relevance. relevance. or present fairly the financial position. 1.20] of an entity’s performance and changes in financial position. agricultural assets are valued at fair value. This is achieved by applying fram the appropriate section of the IFRS for SMEs ewo rk and the principal qualitative characteristics outlined above.36. assumptions basis and on the assumption that the entity is a [IAS 1. [PFRS for SMEs 2. substance over reliability and comparability.19. . certain items are valued at fair value (for example. form. Underlying Financial statements are prepared on an accrual Same as PFRS for SMEs. However. 12 months from the balance sheet date). Materiality depends on the Timeliness and balance size of the omission or misstatement judged in between benefit and cost the particular circumstances.2. investment property. only if management concludes that compliance with and one of the requirements would be so misleading -first as to conflict with the objective of the financial impact of the departure is explained in the . investment property and value and present value. benefit and cost. financial instruments.32] going concern and will continue in operation in the foreseeable future (which is at least. [IAS 1. materiality. comparability.52. Information is material if its omissions or prudence and completeness misstatement could influence the economic are sub-characteristics of decisions of users made on the basis of the reliability.8] Qualitative The principal qualitative characteristics that The four qualitative characteristics make the information provided in financial characteristics under IFRS are statements useful to users are understandability. completeness.14] on relevant and reliable information instead of as qualitative characteristics. but not limited to.27. biological assets and certain categories of financial instrument). is historical cost. prudence.1 PFRS for SMEs Full IFRS Acc ount ing Fair Financial statements should show a true and Similar to IFRS for SMEs. are defined as constraints [PFRS for SMEs 2. 1. relevance. Substance over form. entities are permitted to depart from IFRS for SMEs.4.15-16. reliability. realizable and joint ventures.25. 1. All The measurement basis items other than those carried at fair value most commonly adopted through profit or loss are subject to impairment. understandability. certain categories of include historical cost. presentatio n fair view.

1. [IFRS 1 appendix A] Reconciliati on A first-time adopter’s first financial statements Same as IFRS for SMEs.2.9-35. statements.13] 12 Similarities and differences – A comparison of ‘full IFRS’ and IFRS for SMEs . • A reconciliation of the profit or loss reported under its previous financial reporting framework for the latest period in its most recent annual financial statements to its profit or loss under IFRS for SMEs for the same period. 35. cannot be offset.7 ] financial statements. application of the IFRS for SMEs effective at the the optional exemptions are reporting date for an entity’s first IFRS for SMEs similar but not exactly the financial statements. 12 optional exemptions and one between the sections in the general exemption to the requirement for IFRS for SMEs and full IFRS. [IFRS for SMEs 35. [IFRS 1. adop tion Offsetting Assets and liabilities or income and expenses Same as IFRS for SMEs.13. [IFRS for SMEs 2. except where specifically [IAS 1.6] with full IFRS in its first IFRS financial statements.39] • Reconciliations of its equity reported under its previous financial reporting framework to its equity under IFRS for SMEs for both the transition date and the end of the latest period presented in the entity’s most recent annual financial statements under its previous financial reporting framework.10.1-35.26] than once from the special first-time adoption measurement and restatement exemptions. There are five mandatory same as a result of differences exceptions.4.52] First-time adoption Transition The first-time adopter of the IFRS for SMEs is The first-time adopter of IFRS to IFRS for an entity that presents its first annual financial is an entity that presents SMEs/IFR S statements that conform with the IFRS for SMEs its first annual financial regardless of whether its previous accounting statements that conform to framework was full IFRS or another set of IFRS. 1.11] Date of This is the beginning of the earliest period for This is the beginning of the transition which full comparative information is presented earliest period for which full in accordance with IFRS for SMEs in its first comparative information is IFRS for SMEs financial statements. 1. 1. reason and financial time [IFRS for SMEs 3. The entity is not permitted to benefit more 1. include the following reconciliations: [IFRS 1. [IFRS for SMEs 35. The mandatory exceptions are First-time adoption requires full retrospective the same as in IFRS for SMEs. retrospective application. generally accepted accounting principles. The nature.7.32] required or permitted by the standard. presented in accordance [IFRS for SMEs 35.2.

e - • Hedge accounting.9] f r a m e w o r Optional The following optional exemptions to the Most of the exemptions k exemptions requirement for retrospective application are in IFRS for SMEs are available for use.13] PPE. t • Discontinued operations. • A financial asset or an intangible asset accounted for in accordance with IFRIC 12. costs and leases. 1. PFRS for SMEs Full PFRS a d o pt io Mandatory A first-time adopter does not change the In addition to the exceptions n exceptions accounting that it followed previously for any of in IFRS for SMEs. held for sale. full IFRS the following transactions: • Derecognition of financial assets and has a mandatory exception relating to assets classified as ti m liabilities. • Extractive activities. • Separate financial statements. insofar as they are relevant to also applicable under full the entity: IFRS. • Cumulative translation differences.26] fi rs • Estimates. [IFRS 1. • Arrangements containing a lease. d [IFRS for SMEs 35. a n • Measuring non-controlling interests. There are additional A c c o u n t i n • Business combinations. . exemptions such as borrowing g • Share-based payment transactions. • Deferred income tax. • Fair value or revaluation as deemed cost for [IFRS 1. investment property or intangible assets. • Compound financial instruments.

‘Impracticable’ is defined in the glossary as being: ‘When the entity cannot apply it after making every reasonable effort to do so’. • Decommissioning liabilities included in the cost of PPE. [IFRS for SMEs 35.11] . [IFRS for SMEs 35.10] General The general exemption is on the ground of Not applicable. exemption impracticability.