The International Accounting Standards Board has published a stripped-down set of International Financial Reporting Standards aimed at small and midsized privately held businesses.

Sir David Tweedie

The 230-page set of standards is the product of a five-year effort. The IASB said it consulted with a 40-member working group of experts on small and midsized entities to develop the “IFRS for SMEs” standards. The standards are much simpler than the full IFRS set for public companies. However, they are designed to provide improved comparability for users of accounts, enhance overall confidence in the accounts of small and midsized entities, and reduce the significant costs involved in maintaining standards on a national basis. The standards take a cost-benefit approach. IASB director of standards for SMEs Paul Pacter will lead a group to support international adoption of the standard.

“The publication of IFRS for SMEs is a major breakthrough for companies throughout the world,” said IASB Chairman Sir David Tweedie in a statement. “For the first time, SMEs will have a common high-quality and internationally respected set of accounting requirements. We believe the benefits will be felt in both developed and emerging economies.”

U.S. accounting standard-setters have also been involved in consulting on the standards as IFRS continues to converge with U.S. GAAP. The American Institute of CPAs commended the release of the standards.

“The AICPA welcomes the introduction of IFRS for small and medium entities as an alternative accounting and reporting option for private companies,’’ said AICPA president and CEO Barry Melancon in a statement. “It is indicative of a growing trend toward alternatives for private companies in both the U.S. and worldwide, reflecting the fact that users of private-company financial statements have different needs than users of public-company statements.”

To support the implementation of IFRS for SMEs, the IASC Foundation is developing comprehensive training material and working with international development agencies to provide instructors for regional workshops to train people in the use of the training material, particularly within developing and emerging economies. The training material will be published in a number of languages. The English-language training material will be downloadable free of charge from the IASB’s Web site in late 2009.

The complete IFRS for SMEs, along with the basis for conclusions, illustrative financial statements, and a presentation and disclosure checklist, can be downloaded for free from http://go.iasb.org/IFRSforSMEs.