SMEs: A New Era For Financial Reporting

The introduction of Australian Equivalents to International Financial Reporting Standards (AIFRS) in January 2005 has made the past two years a challenging period for financial reporters.

When AIFRS was adopted by Australia, it was decided that all companies preparing general-purpose financial reports would be required to adopt AIFRS in its entirety. This included a number of highly complex accounting standards that are intended primarily for a capital market structure and are less relevant in the private sector. Furthermore, private companies preparing general purpose financial reports often lack the skills and resources to apply the requirements of AIFRS.