IFRS for SME is a solution in response to international demand from both developed and emerging economies for a rigorous and common set of accounting standards for smaller and medium-sized businesses that is much simpler than full IFRSs.
IFRS for SMEs will:
- Provide improved comparability for users of accounts
- Enhance the overall confidence in the accounts of SMEs
- Reduce significant costs involved of maintaining standards on a national basis.
An SME financial statement does not require complete IFRS and as IFRS was designed to meet the needs of equity investors in companies in public capital markets, they cover a wide range of issues, contain a sizeable amount of implementation guidance and include disclosures appropriate for public companies.
Financial statements of SME does not need the above, but, require a more focused on assessment of short-term cash flows, liquidity and solvency. The objectives of developing IFRS for SME were to meet user needs while balancing costs and benefits from a preparer perspective.
The IFRS for SMEs is derived from full IFRSs with appropriate modifications based on the needs of users of SME financial statements and cost-benefit considerations.
Most of the principles in full IFRS for identifying and measuring assets, liabilities, income and expenses have been simplified, topics not relevant to SMEs have been omitted, and the number of required disclosures has been significantly reduced. To further reduce the reporting burden for SMEs revisions to the IFRS will be limited to once every three years.
The IFRS for SMEs will also provide a platform for growing businesses that are preparing to enter public capital markets, where application of full IFRSs is required.
The IFRS for SMEs is separate from full IFRSs and is therefore available for any jurisdiction to adopt whether or not it has adopted the full IFRSs. It is also for each jurisdiction to determine which entities should use the standard. It is effective immediately on issue.
The publication of IFRS for SMEs is a major breakthrough for companies throughout the world. For the first time, SMEs will have a common high quality and internationally respected set of accounting requirements. The benefits will be felt in both developed and emerging economies.
The economic recovery in the United Arab Emirates is gaining strength, supported by a favorable global environment but subject to increased regional uncertainty.
Growth reflects stronger tourism, logistics, and trade in the emirate of Dubai; and large public investment spending in the emirate of Abu Dhabi, including through Government- Related Entities.
Higher oil prices are also contributing to a marked improvement in the fiscal and external positions of the country. Inflation rate at consumer level is expected to remain moderate at 4.5 percent in the country despite a rise in food prices internationally. Property rents continue to decline. Besides, the UAE’s unemployment rate is at low level of 4.2 percent.
However, it must be noted that risks to the country’s economic recovery remain, including from possible economic spillovers of regional events. In particular, the current re- pricing of geopolitical risk in the region could lead to more challenging market conditions, which may put pressure on the entities that need to roll over external borrowing.
Forecasts indicate the UAE real GDP will grow by five per cent this year and a similar rate in 2012, considering the expected growth of six per cent in emerging economies, this rate of growth in the UAE is good. The UAE and Saudi Arabia will be among the countries leading growth in MENA.
Besides high oil prices, growth in the UAE would be fueled by a surge in the tourism sector, citing a 70-80 per cent jump in hotel occupancy in the first few months of 2011. Trade would be another strong growth sector and the current political unrest in MENA would give a strong push to Dubai as a key commercial centre in the world.
A sharp increase in the UAE’s trade sector this year and next year can be expected and the other sectors that will contribute to growth are telecommunications and transport besides in addition to infrastructure and financial services sectors.
The UAE’s GDP, the second largest in the Arab region after the Saudi economy, expanded by around 3.2 per cent in 2010 after shrinking in 2009. Real GDP recorded one of its highest growth rates of 7.4 per cent in 2008.
Strong oil prices will ally with an upsurge in tourism, trade and communications to lift the UAE’s economy by nearly five per cent in 2011, sharply higher than the growth rate in 2010.GDP growth will remain at a high level in 2012 and the level is considered as one of the best growth rates in the Middle East and North Africa.
Silver has taken over gold as the most rare precious metal, read on and discover why we should buy silver in this current uncertain economy.
Silver mining demand aren’t enough to meet the current demands. Silver is often a by-product of mining copper, lead, zinc and gold. Getting silver is a bonus for mining companies.
Worldwide economic growth mainly in China & India, results in more goods being produced. Silver is the indispensable metal in most electronic goods as it is the most electrically conductive, thermally conductive and reflective.
The declining Dollar With confidence dwindling in fiat currencies such as US dollars and Euros, people and investors are turning to real money which have withstood centuries, such as gold and silver.
A further intriguing fact related to this topic is the rising tide in investing demand – Gold and silver, are also known as commodities. Recently, there have been an increase in commodities demand. Gold is peaking now, and silver, the more neglected real money with gold, will gain investor‘s demand as people realise the gold prices are too high.
Gold/Silver Price Ratio – Gold and silver price ratio have always been 1:16. The current ratio is 1:69. Apparently, there is potential for silver prices to move closer to that of gold’s as silver is becoming more rare compared to gold in the current era.
Demand for gold has bounced back after the downgrade in Italy’s long-term credit rating by the Standard and Poor’s to A from A-plus, indicating a weak economic scenario in the Euro region. Any indication for further monetary stimulus would be seen as bullish for the Precious Metals.
Silver also closed in the green as prices took support from rising gold prices but sharp gains were capped as being an industrial metal it also took cues from movement in the base metals pack. Investment demand for the white metal saw redemption in holdings yesterday by 34.83 tonnes from the iShares Silver trust.
The International Copper Study Group said the world copper market was in deficit by 130,000 tons during the first six months of the year. Supply fell short of demand by 286,000 tons during the same period in 2010. Copper prices came under pressure on Tuesday declined by more than 1 percent on the LME as macroeconomic concerns dominated market sentiments. Prices on the LME touched a 9 – ½ month low as poor global economic prospects led to worries over future demand for the metal.
Signs of Recovery
The world is near the bottom of a global recession that is causing widespread business contraction, increases in unemployment, and shrinking government revenues. Although recent data indicate the large industrialized economies may have reached bottom and are beginning to recover, for the most part, unemployment is still rising. Numerous small banks and households still face huge problems in restoring their balance sheets, and unemployment has combined with sub-prime loans to keep home foreclosures at a high rate. Nearly all industrialized countries and many emerging and developing nations have announced economic stimulus and/or financial sector rescue packages. Several countries have resorted to borrowing from the International Monetary Fund as a last resort.
The Weakness of Financial Systems Worldwide
The crisis has exposed fundamental weaknesses in financial systems worldwide, demonstrated how interconnected and interdependent economies are today, and has posed vexing policy dilemmas. The process for coping with the crisis by countries across the globe has been manifest in three basic phases.
The first has been intervention to contain the contagion and restore confidence in the system. This has required extraordinary measures both in scope, cost, and extent o government reach.
The second has been coping with the secondary effects of the crisis, particularly the global recession and flight of capital from countries in emerging markets and elsewhere that have been affected by the crisis.
The third phase of this process is to make changes in the financial system to reduce risk and prevent future crises. In order to give these proposals political backing, world leaders have called for international meetings to address changes in policy, regulations, oversight, and enforcement.
U S Crisis Trickles Down to all Nations
According to the Economist Intelligence Unit, the aggressive measures that governments have taken to counter the financial crisis have not only helped to prevent a more severe downturn but are now setting the stage for a recovery, albeit a weak one. However, the world economy could weaken again once the stimulus wears off, mainly because government debt has increased dramatically in many countries—eliciting rising concerns about the solvency of the state. This has made current levels of stimulus through government spending not quiet sustainable.
The global financial crisis has brought home an important point: the United States is still a major center of the financial world. Regional financial crises (such as the Asian financial crisis, Japan’s banking crisis, or the Latin American debt crisis) can occur without seriously infecting the rest of the global financial system. But when the U.S. financial system stumbles, it may bring major parts of the rest of the world down with it.6 The reason is that the United States is the main guarantor of the international financial system, the provider of dollars widely used as currency reserves and as an international medium of exchange, and a contributor to much of the financial capital that sloshes around the world seeking higher yields. The rest of the world may not appreciate it, but a financial crisis in the United States often takes on a global hue.
Financial systems are a vital component in the delivery of an organizations programs and services. When managed effectively, financial systems improve service quality, enhance productivity and reduce costs.
A financial system is a system used to exercise financial management, control and accountability of an organizations funds or assets. Included are systems used to record, verify, report, generate and/or execute financial transactions, and those used for the management and control of assets, liabilities and assets.
Systems must be put in place to determine methodology to be used in the development of financial systems. The methodology used must be consistent with the company’s information technology.
Organizations must ensure that financial systems have comprehensive controls to prevent and reduce the risk of loss, error, misuse or fraud to an acceptable level. A risk and controls review must be performed and documented for a new financial system, and whenever there are significant modifications to an existing financial system. Qualified, independent and objective parties must carry out the review.
The scope of a risk and controls review depends on the nature and complexity of the financial system. A comprehensive review includes project management, systems development, general controls and application-based controls. Companies that require a financial system to interface with other systems must establish proper and integrated processes to secure financial information.
Financial systems in the corporate world represent the business study department of a company. Large organizations use financial systems to review financial performance. Sometimes, corporate financial system is a conduit to accounting and management. Financial systems goes a step beyond preparing financial information it measures performance and projects forecasts. Various financial activities come under the corporate financial system. Capital structure, profitability measurements, budgets, sales forecasts, cash flow management and financing decisions are just some of them.
The essential purpose of financial systems is to measure the profit generating capability of the company and recommend best finance options for further growth and profitability.