The Current Problems of Harmonization of Accounting for Small and Medium-sized Enterprises



Year of publication 2019
Type Article in Periodical
Magazine / Source Economic Research-Ekonomska Istraživanja
MU Faculty or unit

Faculty of Economics and Administration

Keywords Accounting; reporting; accounting harmonization; directive; small andmedium sized enterprises; the IFRS for SMEs
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Description Financial statements provide significant information about thefinancial position and performance of an enterprise. In the globalworld, it is necessary that the information is comparable at theinternational level. This requirement poses a problem for smalland medium-sized enterprises as they do their reporting in com-pliance with the national legislations, which are based onDirective 2013/34/EU in the EU member states. No application ofthe Directive in national legislations guarantees the harmonisationof financial statements. Another direction in harmonisation is theIFRS for Small and Medium-sized Entities (SMEs) which the EU hasnot acknowledged as a basis for financial statement creationalthough its significance is not negligible globally–around 80jurisdictions use it or allow its use currently. The paper aims toanalyse the current state of harmonisation of financial statementsof small and medium-sized enterprises. Based on the identifica-tion of essential differences between the national legislation andthe Standard, it attempts to answer the question whether (andhow) the financial position and performance of an enterprise willchange if the accounting framework changes, i.e., in the case oftransfer from reporting based on national legislations to reportingbased on the Standard.
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