OPPORTUNITIES AND LIMITATIONS OF IAS/IFRS FOR SMES
Nadia Oliva
Telematic University Giustino Fortunato, VIA R. DELCOGLIANO 12, 82100 BENEVENTO -ITALY
DOI: https://doi.org/10.31410/limen.2018.647
4th International Scientific – Business Conference LIMEN 2018 – Leadership & Management: Integrated Politics of Research and Innovations, Belgrade – Serbia, December 13, 2018, CONFERENCE PROCEEDINGS published by: Association of Economists and Managers of the Balkans, Belgrade, Serbia; Faculty of Engineering Management – Belgrade, Serbia; Modern Business School – Belgrade, Serbia; Faculty of Business and Management Sciences – Novo Mesto, Slovenia; Faculty of Business Management and Informatics – Novo Mesto, Slovenia; Business Academy Smilevski – BAS, Skopje, Macedonia; BAS Institute of Management, Bitola, Macedonia, ISBN 978-86-80194-15-8
Abstract
Lately, Internationalization has been involving not only large enterprises but also
small and medium sized businesses, which are numerous in Italy and in Europe. With the
increasing recourse to international trade, it has become necessary to use a financial and
economic communication based on a series of accounting regulations that could be generally
accepted and understandable to a vast audience of stakeholders. The implementation of
international accounting principles for small and medium sized enterprises definitely
represents an accounting revolution, and the achievement of an important goal. Because of the
new competitive atmosphere, enterprises, even small ones, cannot remain confined to domestic
markets anymore, but they must aim to their own internationalization, which has become a must
not only in order to acquire new market shares, but also to defend those already acquired. The
IAS/IFRS standards and particularly those meant for SMEs make income statement and results
reached by national companies comparable to those of the companies that operate in the global
market and offer a more transparent type of information. The IFRS standards for SMEs derive
from full IFRS standards with some simplifications, with the objective to promote the
harmonization of accounts. The aim of this work is to highlight the numerous opportunities
offered to SMEs during the homologation process, such as the possibility to access credit or
investment capitals, since they are recognized an advantage at international level. However,
we will dwell on the limitations posed by IFRS, such as the application related difficulties
caused by the different purposes, recipients and evaluation criteria contained in the national
set of rules (particularly in Italy).
small and medium sized businesses, which are numerous in Italy and in Europe. With the
increasing recourse to international trade, it has become necessary to use a financial and
economic communication based on a series of accounting regulations that could be generally
accepted and understandable to a vast audience of stakeholders. The implementation of
international accounting principles for small and medium sized enterprises definitely
represents an accounting revolution, and the achievement of an important goal. Because of the
new competitive atmosphere, enterprises, even small ones, cannot remain confined to domestic
markets anymore, but they must aim to their own internationalization, which has become a must
not only in order to acquire new market shares, but also to defend those already acquired. The
IAS/IFRS standards and particularly those meant for SMEs make income statement and results
reached by national companies comparable to those of the companies that operate in the global
market and offer a more transparent type of information. The IFRS standards for SMEs derive
from full IFRS standards with some simplifications, with the objective to promote the
harmonization of accounts. The aim of this work is to highlight the numerous opportunities
offered to SMEs during the homologation process, such as the possibility to access credit or
investment capitals, since they are recognized an advantage at international level. However,
we will dwell on the limitations posed by IFRS, such as the application related difficulties
caused by the different purposes, recipients and evaluation criteria contained in the national
set of rules (particularly in Italy).
Key words
IAS/IFRS, small and medium enterprise, framework, opportunities and limitations.
