1. UNCTAD-ISAR Accounting and Financial Reporting Guidelines for SMEs The Exchange – World Bank Amman, Jordan 18 June 2013 The Exchange – World Bank Amman, Jordan 18 June 2013

2. UNCTAD-ISAR -Accounting by SMEs Outline: Introduction to UNCTAD-ISAR Background to the work on Accounting by SMEs Main features of the SMEGAs Follow-up work on the SMEGA Level 3

3. Introduction – UNCTAD-ISAR ISAR stands for - the Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting. ECOSOC Resolution 1982/67 To promote reliable and comparable corporate reporting. ISAR stands for - the Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting. ECOSOC Resolution 1982/67 To promote reliable and comparable corporate reporting.

4. Introduction – UNCTAD-ISAR continued … Serviced by the United Nations Conference on Trade and Development (UNCTAD) Held 29 annual sessions so far. Close to 300 experts from about 90 countries participate at the annual session of ISAR.

5. Importance of the SME Sector Employment; Essential goods and services; Export; and Tax base.

6. SMEs and Access to Finance Source: Bank Financing for SMEs Around the World, Policy Research Working Paper 4785, World Bank, November 2008.

7. Main obstacles for SME financing Source: Bank Financing to Small and Medium-Sized Enterprises (SMEs) in Colombia, Policy Research Working Paper 4481, World Bank, January 2008.

8. Background – Accounting by SMEs UNCTAD-ISAR Seventeenth Session - July 2000. Growing volume of International Accounting Standards Need for simple, understandable and user- friendly accounting and reporting system designed with SMEs in mind UNCTAD-ISAR Consultative Group on Accounting by SMEs UNCTAD-ISAR Seventeenth Session - July 2000. Growing volume of International Accounting Standards Need for simple, understandable and user- friendly accounting and reporting system designed with SMEs in mind UNCTAD-ISAR Consultative Group on Accounting by SMEs

9. Categorisation of SMEs Source: Bank Financing to Small and Medium-Sized Enterprises (SMEs) in Colombia, Policy Research Working Paper 4481, World Bank, January 2008.

10. Accounting by SMEs – the approach Diversity in categorization of SMEs Qualitative rather than quantitative categorization.

11. Accounting by SMEs – the approach Three-tiered approach: Public securities or significant public interest; Significant business enterprises, no public securities, no significant public interest; and Smallest entities, owner managed, few employees.

12. Accounting by SMEs – the approach… Accounting and reporting requirements by category: Full set of IFRS; A condensed set of requirements derived from IAS; and Simple accruals-based accounting system.

13. Accounting by SMEs – the Guidance IFRS More than 3,000 pages SMEGA Level 2 66 pages SMEGA Level 3 16 pages

14. Follow-up activities – SMEGA Level 3 Updating SMEGA Level 3: Twenty-third session (October 2006) revision of SMEGA Level 3 proposed Completed November 2008 One of the main changes - an optional cash flow statement.

15. Follow-up activities – SMEGA Level 3 Training for SME owners and employees- in cooperation with Empretec centers Research on the current state of accounting and financial reporting needs of SMEs

16. For Further Information: Please visit the ISAR website at: http://www.unctad.org/isar Link to ISAR publications on SMEGAs http://unctad.org/en/Pages/DIAE/ISAR/Financial-Accounting-and- Reporting.aspx

17. Accounting and Financial Reporting Guidelines for SMEs Thank you.