Most businesses in the world including the UAE are SMEs. Yet many still prepare their financials under full IFRS, a framework designed for listed companies and public-accountable entities.
Why? Habit. Comfort. And sometimes… simply not knowing there is a better option.
A Ready-Made Standard for SMEs
The IFRS for SMEs is already permitted in the UAE. An entity qualifies if it meets at least two of these three criteria:
- Assets ≤ AED 75 million
- Revenue ≤ AED 150 million
- Employees ≤ 200
Miss one? You still qualify if the other two are met.
So Why Isn’t It Widely Adopted?
Because adoption requires auditors to unlearn and relearn. It requires banks to re-evaluate their credit comfort. It requires SME owners to ask the right questions.
And none of these happen unless someone starts the conversation.
Auditors
IFRS for SMEs is not a “lighter” standard. It is a purpose-built standard simpler where simplicity adds clarity, not where it compromises reliability.
The disclosures are leaner. The measurement rules are practical. The financials become easier for management, lenders, and even boards to interpret.
Banks & Investors
A clean, consistent, comparable SME-appropriate framework actually improves risk assessment. Most rejections happen because the financials are incomplete, inconsistent, or unclear not because they use IFRS for SMEs.
A well-prepared IFRS for SMEs set of accounts is far more useful than a poorly applied full IFRS set.
SME Owners & Decision Makers
If your business qualifies… Have you ever asked your auditor about IFRS for SMEs? Have you checked with your bank if they accept it? Have you assessed the cost savings in audit effort, training, and compliance?
Most importantly Does your current reporting help you run the business better?
For many SMEs, IFRS for SMEs is not just a compliance choice. It is a business clarity choice.
A Thought Worth Considering
When 90% of the world’s businesses are SMEs, should they continue using standards written for the remaining 10%?
Or is it time to adopt a standard that finally speaks their language?
Disclaimer: Content posted is for informational and knowledge sharing purposes only, and is not intended to be a substitute for professional advice related to tax, finance or accounting. The view/interpretation of the publisher is based on the available Law, guidelines and information. Each reader should take due professional care before you act after reading the contents of that article/post. No warranty whatsoever is made that any of the articles are accurate and is not intended to provide, and should not be relied on for tax or accounting advice.Contributor
CA Hemant Mundhra is a highly experienced Chartered Accountant and Management Accountant with over 15 years of expertise in the field. He is currently working as CFO on Demand at The Total CFO Management Consultancy in Dubai, UAE. Hemant helps clients solve their financial management needs by providing actionable documents like business plans, valuation and budget documents, with additional services in compliance, corporate governance, and taxation matters.
