The European Federation for Accountants and Auditors (EFAA) presented its report The Trickle Down Effect – IFRS and accounting by SMEs on 28th of March in Brussels during a roundtable event gathering stakeholders from the European profession, including a representative of the Body of Expert and Licensed Accountants of Romania (CECCAR).
Richard Martin, ACCA Head of Corporate Reporting and EFAA Accounting Expert Group Chair, and Marie Lang, EFAA Special Advisor, authors of this report presented their conclusions during the first session of the round table: accounting standards for listed companies in Europe, IFRSs, do influence the development of the accounting treatments required of small and medium-sized entities (SMEs) – the so-called “trickle down” effect. As the report states:
“Changes in SME accounting have often been motivated by convergence with IFRS, but the extent of ‘trickle down’ varies owing to factors that include how countries have judged the complexity of accounting and the use of fair value provisions. In addition, ‘trickle down’ takes time and the most recent IFRS have tended not to have been adopted for SMEs.”
Further on, the roundtable discussions featured interventions by Andrew Watchman, EFRAG CEO and TEG Chair, Jean-Philippe Rabine, Policy Officer for Accounting and Financial Reporting at the European Commission, Luc Hendrickx, Director for Enterprise Policy and External Relations at the European SME organization UEAPME, and Danielle Stewart, member of the Financial Reporting Council’s and focused on the need for further consideration of the trickle-down effect: “We believe the evidence demands to be taken seriously and the effect to be brought onto the agenda of the European accounting standard setting community” pointed out Paul Thompson, EFAA Director.
For a full review on this event and a complete access to the EFFA report please visit this webpage.
Note about EFAA
The European Federation of Accountants and Auditors for small and medium-sized enterprises (EFAA) is an umbrella organization for national accountants and auditors’ organizations whose individual members provide professional services primarily to SMEs in Europe. EFAA has 16 members throughout Europe and represents more than 370,000 accountants, auditors, and tax advisors on their behalf in Europe and beyond.