The relationship between

‘FULL’ IFRS and IFRS for

SME’s. (Including SA GAAP
& GRAP)
 Learning
outcomes
At the end of this learning unit, a student should:
+ Be able to explain the relationship between IFRS, IFRS for
SMEs, SA GAAP and GRAP.
 Standards & Principles: A Comparison analysis

Full IFRS IFRS for SME's SA GAAP GRAP

The International Accounting The IASB also Before 2005 the Statements The Accounting Standard
Standard Board(IASB) developed developed and of Generally accepted Board(ASB) principal
and published International Financial published a separate Accounting function is to set generally
Reporting Standards (IFRS) and standard called IFRS Practise(GAAP)needed to recognised accounting
promoting the use of these for small and medium be adhered to when practice (GRAP) as required
standards in financial reporting i.e. sized entities. preparing the financial by section216(1) of the
general purpose financial statements statements of entities Constitution of the Republic
and other financial reporting. incorporated under the of South Africa (Act 108of
previous CO's ACT (Act 61 1996).
of 1973) which required this
compliance with the
Statements of GAAP.
 Standards & Principles: A Comparison analysis
Full IFRS
IFRS sets out recognition,
measurement, presentation &
disclosure requirements dealing with
transactions, events and conditions
for general purpose financial
reporting. (Transactions reported in
financial statements should be in
compliance with the interpretations
and requirements of the accounting
standards. (IFRS, IFRIC and IAS
which is designated part of IFRS)
IFRS for SME's SA GAAP GRAP
Applies to general From 1 January 2005 South The GRAP framework for the
purpose financial African Statements of GAAP preparation and presentation
reporting of entities comply with IFRS (SA adopted of financial statements were
designed to provide IFRS from 2003) as requested developed by the International
useful information to a by the JSE that all listed Accounting Standards
wide range of users who companies hadtocomplywith Committee (IASC), issued in
are not in a position to IFRSs. July 1988.
demand reports tailored
to meet their specific
needs namely financial
reporting for external
users.
 Standards & Principles: A Comparison analysis
Full IFRS
IFRS are based on the Conceptual
Framework for Preparation and
Presentation of Financial
Statements(Frame of Reference
document)which addresses the
concepts underlying the information
presented in general purpose financial
statements.
IFRS for SME's SA GAAP GRAP
Make use of an The Cos ACT 71 of 2008 which GRAP sets out the
accounting conceptual came into effect on 1 May principles to provide a
framework to increase the 2011, established a body framework of reference to be
usefulness and known as the Financial used for the public sector
understandability of Reporting Standards Council and to assist preparers,
financial statements for (FRSC) and is now the SA's users of financial information
users constituted governmental and auditors.(in order to
accounting standard setting form an opinion
body. whethermfinancial
statements conform to
GRAP)
Standards & Principles: A Comparison analysis
Full IFRS IFRS for SME's SA GAAP GRAP
The objective of the framework is to The framework enhance the All financial periods commencing on The framework is intendedto
facilitate the consistent and logical comparability of financial or after 1 December 2012 i.e. all be relevant to the financial
formulation of IFRS. statements of different companies had to convert to statements of any entity
entities. IFRSor IFRSforSME's within the public sector,
regardless of the size of the
reporting entity and the
nature of the
service provided.
TheFramework,issued by IASB,appliesto Framework provides Applies to the following
thefinancialstatements of allcommercial, practitioners with universally entities: Departments
industrial and business reporting entities, accepted accounting (national or provincial),
whether in public or private sector. concepts and principles that public entities, constitutional
can be applied to business institutions, municipalities
Transactions
and board, commissions,
Applies to all profit-orientated entities which This applies also to private
companies, corporations;
are publicly accountable and entities listed entities and non-publicly
funds or other entities under
on the JSE. Refer to Chapter 16 for more accountable entities.
details. the ownership of a
municipality; and Parliament
and the provincial
legislatures.
Questions