FREE IFRS for SMEs Framework and Scope Questions and Answers
Why does IFRS for SMEs simplify recognition and measurement compared to full IFRS?
IFRS for SMEs simplifies recognition and measurement to reduce compliance costs and administrative burdens for small businesses.
What is the purpose of impairment testing in IFRS for SMEs?
Impairment testing ensures that assets are not carried at more than their recoverable amount, preventing overstatement of financial positions.
What is the principle of recognition in IFRS for SMEs?
Recognition in IFRS for SMEs requires that an item be recorded in financial statements if it meets the definition of an asset, liability, income, or expense and provides relevant financial information.
Which of the following is a key criterion for recognizing revenue under IFRS for SMEs?
Revenue is recognized when it is probable that economic benefits will flow to the entity and the amount can be reliably measured.
What measurement basis is commonly used in IFRS for SMEs?
IFRS for SMEs primarily uses historical cost as the measurement basis, but fair value may be used in specific circumstances.
How are financial liabilities measured under IFRS for SMEs?
Financial liabilities are typically measured at amortized cost unless they are held for trading, in which case fair value may be used.