The IASB published in 2009 the “International Financial Reporting Standard for Small and Medium-Sized Entities” (IFRS for SMEs). Private entities, however, have no or little separation of ownership and control, and the extension of a “strong equity” accounting system to such entities could produce financial statements that are not consistent with the needs of the users of financial information. In this paper we argue that a common framework for financial reporting for public and private entities is in the best interest of the users of financial information. In fact, the coexistence of a two or even three-tiered structure of accounting regulation could lead to confusion for the users and to an increase in the costs of financial reporting for the preparers.
The evolution of financial reporting for private entities
BERTONI, MICHELE;DE ROSA, Bruno
2010-01-01
Abstract
The IASB published in 2009 the “International Financial Reporting Standard for Small and Medium-Sized Entities” (IFRS for SMEs). Private entities, however, have no or little separation of ownership and control, and the extension of a “strong equity” accounting system to such entities could produce financial statements that are not consistent with the needs of the users of financial information. In this paper we argue that a common framework for financial reporting for public and private entities is in the best interest of the users of financial information. In fact, the coexistence of a two or even three-tiered structure of accounting regulation could lead to confusion for the users and to an increase in the costs of financial reporting for the preparers.Pubblicazioni consigliate
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