The Peruvian Accounting Standards Board, through its resolution No. 003-2020-eF/30
has made official the International Financial Reporting Standard for Small and Medium sized Entities (IFRS for SMEs*) as amended in 2015, at its meeting on September 1, 2020. This standard is addressed to those companies that do not have a public obligation to present financial information for external users.
Already in April 2016, the Peruvian Constitutional Court declared unconstitutional the obligation of non-supervised entities to submit audited financial information to the Superintendence of the Stock Market, for which they had to gradually adapt to International Financial Reporting Standards (IFRS), based on their level of income or assets. This declaration was convenient for many company executives, mainly of medium and small size, so they decided to leave in “stand by” this process of adapting their financial statements to IFRS, because they considered it an important saving in their budgets.
In regard to the scope of application of this standard for SMEs, companies and entities under the supervision and control of the Superintendence of the Stock Market – SMV and the Superintendence of Banking, Insurance and Private Pension Fund Administrators – SBS are excluded; the latter must continue to use the full IFRS.
It is important to mention that in Peru the use of complete IFRS has always been mandatory, however, this standard aimed at SMEs will help these companies to deal with events and transactions in a less complex way; as has been applied in some other countries in the region, such as Colombia and Chile, for example. This is an opportunity for these companies to be more competitive and remain operational in the short and long term.
It is important that managers promote the application of this rule, not only because it is mandatory, but also in order to achieve high quality standards of financial information, which will allow their companies to be in a better position (competitive advantage) to access capital markets, global markets and improve the relationship with the tax administration.