Small and medium sized enterprises play a very important role for the development of an economy. They not only provide large employment opportunities but also helps in industrialization, more equitable distribution of national income, creation of wealth and reducing regional imbalances. According to estimates SME’s generate around 100 million jobs by employing almost 40% of India’s workforce and contribute around 8% of India’s GDP. Indian SMEs generate highest employment after agriculture. SMESs often face the problems of raising funds from banks or other financial institutions especially for their high risk projects. The inception of common accounting principles will help SMEs in comparability of their financial statements globally and will also help them in raising funds. On 1st July 2009, IASB issued a single set of global reporting standards called IFRS for SMEs, a separate code of GAAP applicable only to SMEs around the globe. Many companies regardless of their size are compelled by legal rules of a specific country in which they run to make financial statements that are in conformity with their particular set of rules. As stated by IASB almost 95% of the companies of the world are qualified to use IFRS for SMEs. One of the main reason to adopt IFRS for SMEs is that of better access of capital because most of the SMEs often face the problem of capital because they don’t have proper books of accounts, not having valid bills and because of the insufficiency of capital SMEs often face the problem of investment and growth. This paper will study the current situation of SMEs accounting and financial reporting and what are the views of SMEs, Chartered Accountants, academic experts regarding these standards for SMEs and whether SMEs are ready to adopt it. This Paper is based on a questionnaire based survey investigating the appropriateness of the IASB proposed standards for SMEs.
Volume 11 | 01-Special Issue
Pages: 917-922