Accounting by Small and Medium-sized Enterprises

At its 17th session in July 2000, ISAR identified a number of obstacles that small and medium-sized enterprises (SMEs) were facing in applying accounting standards that had been issued by various standard-setting bodies, both national and international. These existing standards have been created primarily with the financial reporting needs of larger companies in mind. Consequently, it has often been difficult to apply them to SMEs, particularly those in developing countries and countries with economies in transition. ISAR therefore agreed to work on identifying possible approaches that would meet the accounting and financial reporting needs of SMEs.
The aim of UNCTAD’s work in this area is to assist developing countries and countries with economies in transition in addressing the accounting and financial reporting needs of SMEs. Accounting and reporting for SMEs is a critical component of a broader enabling environment that allows SMEs to compete, grow, access finance and attract investors. To meet its objectives, UNCTAD works through ISAR’s broad range of international experts to develop guidance for SMEs that:
  • meets their accounting and financial reporting needs;
  • is simple, understandable and user-friendly;
  • produces useful management information;
  • is flexible enough to accommodate the growth of business; and
  • increases the potential of some SMEs to adopt International Financial Reporting Standards (IFRS) at some future point.
The Secretariat organized consultations with a broad range of experts in the field of SME accounting. The consultations provided useful input to ISAR´s deliberations on this issue. Through these deliberations, ISAR produced two separate guidance documents for two categories of SMEs: Level 2 (larger SMEs) and Level 3 (smaller SMEs).
The revision to the Level 3 Guidance followed from a request at the 23rd session for the UNCTAD secretariat to reconvene a consultative group to update the original Level 3 Guidance. During the 2007 intersession period, the consultative group met in Geneva and conducted discussions on this topic. For the 24th session, the consultative group proposed revisions of the Level 3 Guidance. These revisions were later incorporated along with the deliberations of the Group of Experts in the revised version approved by the 25th session of ISAR.
Ongoing Activities

Organisations or individual experts interested in SME accounting issues and the use of this guidance are welcome to contact us at

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