IFAC chief calls for comprehensible financial reporting standards

"Reading through 250 pages of detailed financial reporting standards, especially those in the SME sector can be mind-boggling, difficult and incomprehensible, not to mention time consuming and tedious.

International Financial Reporting Standards therefore should be simplified," said International Federation of Accountants (IFAC) President Fermin del Valle, who was visiting Sri Lanka on an invitation extended by South Asian Federation of Accountants (SAFA).

Participating in a series of events organised by the four premier accounting bodies in Sri Lanka, AAT Sri Lanka, ACCA Sri Lanka, CIMA Sri Lanka Division and the Institute of Chartered Accountants of Sri Lanka, del Valle was the keynote speaker at a CEOs' Breakfast and a Technical Forum themed on Evolution in Reporting for Economic Development.

Speaking on the applicability of accounting and auditing standards for SMEs, del Valle said that on January 19 the International Auditing Standards and Assurance Board which is the standard setting body designated by and operating under the auspices of IFAC, will issue the Exposure Draft on IFRS for SMEs. "We do understand that SMEs have distinct needs and may require a separate analysis of accounting and auditing standards.

These standards for SMEs are for entities that have to provide general purpose financial statements. Our ultimate goal is to bring all standards under one umbrella so that SMEs or large corporates will have a universal reporting standardisation that is comprehensive but at the same time comprehensible."