Muscat: A workshop on International Financial Reporting Standards (IFRS) inaugurated by Yahya Al Jabri, chairman of the Duqm Special Economic Zone Authority, held here yesterday discussed various aspects of IFRS, the regulatory structure of the International Accounting Standards Board (IASB), and how a single set of financial reporting standards for the emerging SME sector is clearly the need of the hour.
In his welcome remarks, Davis Kallukaran, managing partner at Horwath Mak Ghazali, said, "The implementation of IFRS is key to increasing the transparency and comparability of financial information and to further enhancing the efficiency of the economy. Since the introduction of IFRS for small and medium enterprises (SMEs), over 50 countries have adopted or have been significantly influenced by the new standards. The SME standards are also specifically written for privately held businesses, which avoids the need to make many disclosures that are required under the full IFRS and is less complex in a number of ways. Several topics that are not relevant to SMEs have been omitted. Only a few disclosures are now required, which is a great relief to these entities."
Muna Al Ghazali, the founding partner at Crowe Horwath Oman, speaking on the occasion, said, "Most of the countries in this region follow the IFRS, and the same is true for Oman. The uniformity in the application of the standards across the region makes it easier for stakeholders such as bankers, suppliers, and customers to understand the financial position of a business in the same way as their colleagues in other countries do."
Tom C. Mathew, Audit Partner at Crowe Horwath Oman, was also present on the dais.
Shridhar Sampath, a certified public accountant (USA) and chartered accountant with over 25 years of experience in the field, and T. P. Anand, a chartered accountant and expert in IFRS and corporate governance, gave an outline on the IASB and the IFRS used around the world; the application of a conceptual framework; methods of applying relevant financial reporting standards to key elements of financial reports; the fundamental requirements of IFRS on a standard-by-standard basis; the application of IFRS to practical accounting scenarios and problems; ways to understand the accounting standards applications for specialised industries and complex transactions.
According to the IASB, small and medium-sized entities do not have public accountability.
These standards are suitable for all entities except those whose securities are publicly traded and financial institutions such as banks and insurance companies. So SME standards are bound to make reporting less complicated for the estimated 95 per cent of business entities the world over. However, the decisions rest with regulatory authorities in each country. In the Sultanate, a small company is defined as one employing less than nine employees and a medium-sized company as one employing nine to ninety-nine employees.
According to the Ministry of National Economy of Oman, based on the above definition, there are close to 120,000 SMEs in the Sultanate, contributing some 20 per cent of Oman's GDP.