Skip to content

ACCA Strategic Professional · Strategic Business Reporting (International) · The applications, strengths and weaknesses of the accounting framework

Zeta Ltd is a small entity in a country that has adopted the IFRS for SMEs Accounting Standard. Which statement about the standard is correct?

The IFRS for SMEs Accounting Standard is meant for entities without public accountability that publish general purpose financial statements for external users. The IASB sets no turnover or employee threshold, and entities cannot pick and mix between the SME standard and full IFRS transaction by transaction.

  1. AIt is designed for entities without public accountability that publish general purpose financial statements for external usersCorrect
  2. BIt is mandatory for all entities whose turnover is below a size threshold set by the IASB
  3. CIt applies to listed entities with fewer than 250 employees
  4. DIt permits an entity to choose freely between the SME standard and full IFRS for each individual transaction

Explanation

The IFRS for SMEs Accounting Standard is aimed at entities that do not have public accountability and publish general purpose financial statements. The IASB sets no size test; eligibility is decided by public accountability and by local jurisdictions. Mixing standards transaction by transaction is not permitted.

Did you get it right without looking?

One question tells you little. A timed set on The applications, strengths and weaknesses of the accounting framework shows your real accuracy, how long you take and where you lose marks.

Practise The applications, strengths and weaknesses of the accounting frameworkFree diagnostic mock

More The applications, strengths and weaknesses of the accounting framework questions