IASB releases IFRS for private entities.

On July 9, the International Accounting Standards Board issued its International Financial Reporting Standard for Small and Medium Entities (IFRS for SMEs). SMEs are entities that publish general purpose financial statements for external users and do not have public accountability. Under the IASB's definition, that means a company that files its financial statements with a securities commission or other regulatory organization for the purpose of issuing any class of instruments in a public market; or it holds assets in a fiduciary capacity for a broad group of outsiders. In the U.S., SMEs generally are referred to as private companies.

Examples of when a private company in the U.S. may decide to use IFRS for SMEs include: the company is owned by a foreign parent, has a foreign investor, is a supplier to foreign companies or has a foreign venture partner. Private companies can now choose between IFRS and other financial reporting methods, using the framework that best suits their objectives and the needs of their financial statement users. In May 2008, the AICPA governing Council voted to recognize the IASB as an international accounting standard setter, giving AICPA members the option to use IFRS as an alternative to U.S. GAAP (currently, the Securities and Exchange Commission still requires U.S. public companies to file their financial statements with the SEC using GAAP).

IFRS for SMEs is a modification and simplification of full IFRS aimed at meeting the needs of private...