SMEs’ adoption of IFRS to commence December 31 — PWC

By Peter Egwuatu

The International Financial Reporting Standard, IFRS, for Small and Medium Scale Enterprises, SMEs is expected to be adopted from December 31, 2014.

The Senior Manager, Capital Markets and Accounting Advisory Services Group, PriceWaterhouseCooppers Nigeria , PWC, Uloma Ojinmah, disclosed this during an IFRS Media Training Workshop organised by BusinessDay Nigeria in Lagos.

While speaking on the Financial Reporting Council of Nigeria, FRCN roadmap and its implication, she said: “The phase one implementation of the IFRS started with the publicly listed entities and significant public interest entities. These entities were expected to prepare their financial statements using applicable IFRS by December 31. 2012.


For the phase two implementation, other public interest entities are expected to comply with the standard. In fact, all public interest entities are expected to mandatorily adopt IFRS, for statutory purposes by December 31, 2013. The other public interest entities are entities that are not listed which have significant public interest because of the nature of business, size and number of employee. For the phase three, it is expected that SMEs will adopt theirs from December. In fact, IFRS for the SMEs shall mandatorily be adopted as December 31, 2014.”

She explained that while adopting the IFRS for the first time, a company’s first set of IRFS financial statement should present its financial position and performance as if the company had reported using IFRS.
According to her “20 optional exemptions and seven mandatory exceptions limit extent of retrospective application are available to guide companies when applying the principle.

On the implementation impact, she said “Adjustments are required to assets and liabilities to establish the opening statement of financial position. Such adjustments, which are to be passed via retained earnings include: Recognition of new assets and liabilities; De-recognition of some assets and liabilities and Re-measurement of some assets and liabilities by using fair value versus historic cost.”

Speaking further, Ojinmah said that IFRS will have a broad impact on Nigerian companies as every details of information required in preparing financial statement are required.
Some of the impact, according to her, include: capital impact, tax impact, analyst reactions, share price impact, peer comparability, amongst others

She stated that IRFS will impact businesses in may ways, such as: people, business relationships , tax and regulation, communications, financial implications, and systems and processes.

Culled from www.vanguardngr.com