IFRS for SMEs: Current issues in reporting of SMES in the Czech Republic, Slovak Republic, Poland and Ukraine

Abstract

The SMEs sector plays a very important role in economy; it is a driving force of business, of growth, innovations as well as competitiveness. However, cross-border activities of SMEs are limited by many obstacles. The biggest obstacle is the existence of 27 different systems of accounting within the European Union, which have to be harmonised. The best tool of harmonization is IFRS for SMEs. European tax legislation does not accept accounting income calculated according to IFRS as a basis for income tax calculation and thus reporting according to IFRS is something extra to local financial statements. The aim of this paper is to compare the experience in standardizing financial reporting of SMEs in the Czech Republic, Slovak Republic, Poland and Ukraine.