Are you a small/ medium sized business and currently have some accounting work done but you aren’t too clear on whether your existing reporting is sufficient, compliant or you simply just can’t understand exactly how all of the various reports impact your Company’s objective? Should your business be considered an SME? Let’s dive a little more into this.
SME's, as defined by the IASB (International Accounting Standards Board) are small and medium sized entities that:
1. Do not have public accountability
2. Publish financial statements for external use
Financial statements may be published for external use by potential investors or the owner of the Company who may not be involved in the day to day operations of the Business. Financial statements present the Business's financial position fairly.
An entity will be considered as having public accountability if:
1. Its debt is traded in a public market (such as domestic of foreign stock exchange)
2. Its assets are held for a group of outsiders as one of its primary businesses (fiduciary capacity.) Simply put, this refers to a business, entity or person handling the money, property of business of another party in a way that benefits them. Entities that fall into this category includes real estate agents, banks, credit unions, travel agents.
SME’s who operate in Trinidad and Tobago should use IFRS for SME's as the framework for presenting their financial statements. It provides atrue representation of the business', financial performance, cash flows, revenue, expenses, income, debt.
For more,
click here to reach out.