IFRS Foundation Issues Educational Module for Section 1 of IFRS for SMEs

Posted 18 July 2025 Written by Acts Online
Category Financial and Accounting

Brought to you by SA Accounting Academy: The IFRS Foundation has released a new educational module designed to support the implementation of Section 1 of the third edition of the IFRS for SMEs Accounting Standard.

In terms of the third edition of the IFRS for SMEs Accounting Standard, which was issued in February 2025, the International Accounting Standards Board (IASB) technical staff have prepared this module to clarify the scope of the Standard. Section 1 defines which entities are eligible to apply the IFRS for SMEs Accounting Standard and establishes the criteria for public accountability.

The module provides detailed guidance on the following regulatory aspects:

  • The definition of small and medium-sized entities (SMEs) for financial reporting purposes.
  • Identifying entities that have public accountability, such as those whose debt or equity instruments are traded in a public market.
  • Criteria for entities that hold assets in a fiduciary capacity for a broad group of outsiders as one of their primary businesses.
  • The application of the Standard by subsidiaries whose parent uses full IFRS Accounting Standards.

Click here to download the IFRS for SMEs Educational Module 1: Small and Medium-sized Entities.

What this means for you, your business, or your clients

  • For yourself: You must assess your understanding of the revised scope definitions in the February 2025 edition to ensure accurate professional advice regarding reporting framework selection.
  • For your business: The practice should update its audit and review templates to reflect the latest IASB guidance on Section 1 eligibility, ensuring that engagements are performed under the correct regulatory framework.
  • For your clients: Clients currently reporting under IFRS for SMEs must be evaluated against the clarified public accountability criteria to confirm their continued eligibility for the simplified standard.

Originally published at https://accountingacademy.co.za/news/read/ifrs-foundation-ifrs-for-smes-educational-module-1

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