SME accounting to go with international standards

Within the next three years over 35 countries will start to follow the same international accounting rules for SMEs, which will increase pressure on developed nations to implement the new set of standards.

Many of the counties that have pledged to utilize the standards are either emerging or developing economies and have noted that they would like to use the new financial standards for SMEs fully by the year 2013.

Director of standards for SMEs for the International Accounting Standards Board, Paul Pacter, conducted the poll during a meeting in 2009 after the new rules were in force for two months.

The project, which is based on a seven year timeline, is aimed at producing a consistent set of rules for use by SMES that were published in July of 2009 in a 230 page booklet.  The booklet was met with approval from the World Bank and many other international organizations as a positive way for emerging economies to increase the capital within their counties.

The goal of standardization of accounting is that investors will better understand how much a company is valued at, regardless of where it operates, which may prompt them to invest in a company they otherwise would overlook.

Some of the most eager countries to start using the new standards were Brazil, Swaziland, and El Salvador, which all are considered to be emerging nations.

Pacter said this is due to the fact that the smaller counties want to have better access to potential capital which the consistency will allow them. He now feels that the time is right for the EU to take a positive lead in implementing the same rules within the Union