The Institute of Chartered Accountants of Jamaica (ICAJ) has adopted
twenty-five standards as Interim Standards for qualifying small
companies. These standards comprise selected International Financial
Reporting Standards (IFRS) that the ICAJ considers applicable to all
types of business, regardless of size and, therefore, should be used
as the basis for preparing financial statements for qualifying small
entities.
The Seventh Schedule of the Companies
Act 2004 provides that the accounts of a company shall give a true
and fair view of the state of affairs of the company as at the end
of its financial year. The Schedule also provides that, except in
relation to small companies, the accounts of a company shall be
prepared in accordance with generally accepted accounting principles
promulgated by the ICAJ, from time to time, or such other body as
the Minister may prescribe.
Under the Companies Act 2004, a small
company shall present accounts in accordance with accounting
principles that are appropriate to its circumstances having regard
to the requirement for those accounts to present a true and fair
view of the state of affairs and the results of operation of the
company.
The Act defines a qualifying company
as small in relation to a financial year, if it meets two, or more,
of the criteria specified hereunder:
- Turnover of less
than $40 million
- Total assets of
less than $30 million
- Total number of
employees of less than 25
A qualifying group of companies
should, on a consolidated basis, meet two or more of the following
criteria:
- Turnover of less than $80 million
- Total assets of less than $60
million
- Total number of employees of less
than 50
The Companies Act also requires that
the qualifying company or group of companies must meet the criteria
specified in the current year and in the immediately preceding year.
A company is, however, disqualified, if it is a public listed
company, a company licensed under the Banking Act, an insurance
company registered under the Insurance Act, a licensee under the
Securities Act, a company licensed under the Financial Institutions
Act, a society registered under the Building Societies Act or the
Cooperative Societies Act.
Currently, all companies are required
to prepare their financial statements in accordance with IFRS.
Effective 1 February 2005, under the Companies Act 2004, a small
company may elect exemption from preparing its accounts under IFRS.
A set of alternative small company standards, however, does not
exist at present.
The International Accounting
Standards Board (IASB) is currently working on a project to issue an
exposure draft on a set of standards for small and medium -sized
entities (SME) in 2006. These standards are expected to be issued as
final in 2007. The ICAJ has taken the decision to adopt the
accompanying IFRS as Interim Standards for Small Companies, to be
used by qualifying small companies that elect exemption from
applying IFRS under the Companies Act. On issuance of the IASB
standards on SME, these Interim Standards as adopted by the ICAJ
will be superseded.
The attached twenty-five standards
are applicable and companies that elect to adopt them under the
exemption provision will have to apply all.
Qualifying small companies may apply
these standards for financial reporting periods beginning on, or
after, January 1, 2006.
Interim Standards for Small
Companies
| IFRS 1 |
First-time
Adoption of International Financial Reporting Standards |
| IFRS 3 |
Business
Combinations |
| IFRS 5 |
Non-current
Assets Held for Sale and Discontinued Operations |
| IAS 1 |
Presentation
of Financial Statements |
| IAS 2 |
Inventories |
| IAS 7 |
Cash
Flow Statements |
| IAS 8 |
Accounting
Policies, Changes in Accounting Estimates and Errors |
| IAS 10 |
Events
After the Balance Sheet Date |
| IAS 11 |
Construction
Contracts |
| IAS 12 |
Income
Taxes |
| IAS 16 |
Property,
Plant and Equipment |
| IAS 17 |
Leases |
| IAS 18 |
Revenue |
| IAS 20 |
Accounting
for Government Grants & Disclosure of Government
Assistance |
| IAS 21 |
The
Effects of Changes in Foreign Exchange Rates |
| IAS 23 |
Borrowing
Costs |
| IAS 24 |
Related
Party Disclosures |
| IAS 27 |
Consolidated
and Separate Financial Statements |
| IAS 28 |
Investments
in Associates |
| IAS 31 |
Interests
in Joint Ventures |
| IAS 32 |
Financial
Instruments: Disclosure and Presentation |
| IAS 36 |
Impairment
of Assets |
| IAS 37 |
Provisions,
Contingent Liabilities and Contingent Assets |
| IAS 38 |
Intangible
Assets |
| IAS 40 |
Investment
Property |
|
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