In February 2025, the International Accounting Standards Board (IASB) issued the Third Edition of the IFRS for SMEs Accounting Standard.
This revised standard is effective for annual reporting periods beginning on or after 1 January 2027, with early application permitted.
The updated edition introduces notable changes in areas including financial statement presentation, revenue recognition, financial instruments, leases, and consolidation.
These changes aim to better align SME financial reporting with recent updates to full IFRS Standards, while retaining the cost-benefit considerations appropriate for smaller entities.
In accordance with Section 10.13 of the IFRS for SMEs, entities that have elected not to early adopt the revised standard must disclose this fact in their financial statements and provide the following:
- The title of the new standard (i.e., IFRS for SMEs Accounting Standard – Third Edition, issued in February 2025).
- The nature of the impending change in accounting policy.
- The date from which application is required (i.e., annual periods beginning on or after 1 January 2027).
- The date at which the entity plans to apply the new standard, if earlier than the mandatory date.
- A discussion of the possible impact that application of the new standard will have on the entity’s financial statements in the period of initial application.
You might consider using this wording to disclose in the significant of accounting policies of your financial statements.
“Accounting Standards Issued but Not Yet Effective
In February 2025, the International Accounting Standards Board (IASB) issued the Third Edition of the IFRS for SMEs Accounting Standard, which will be concurrently adopted in Cambodia as CIFRS for SMEs. The revised standard becomes effective for annual reporting periods beginning on or after 1 January 2027, with early adoption permitted. The Company has elected not to adopt the standard early and will apply it from the mandatory effective date. This edition introduces substantial amendments across key accounting areas, including financial statement presentation, revenue recognition, financial instruments, consolidation, leases, and other reporting requirements, to enhance alignment with full IFRS. As at the reporting date, management is evaluating the potential impact of these changes on the Company’s financial statements, including any adjustments to accounting policies, disclosures, and related reporting processes.”
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