Overview
IFRS for SMEs is the practical default for typical Chwezi clients. This skill is the cross-reference between full IFRS standards and IFRS for SMEs sections, plus the practical guidance on what differs.
Required first reads
doctrine/accounting-finance-doctrine.mddoctrine/references/ifrs-for-smes-default.mddoctrine/references/full-ifrs-overlay.mddoctrine/references/policy-hierarchy.md
Cross-reference table
| Full IFRS | IFRS for SMEs section | Practical differences |
|---|---|---|
| IAS 1 Presentation | Section 3, 4, 5, 6 | SMEs reduce minimum line items; OCI presentation simpler. |
| IAS 2 Inventories | Section 13 | Substantially aligned. FIFO or weighted average; LIFO not permitted in either. |
| IAS 7 Cash flows | Section 7 | Substantially aligned. |
| IAS 8 Accounting policies, estimates, errors | Section 10 | Substantially aligned. |
| IAS 10 Events after the reporting period | Section 32 | Substantially aligned. |
| IAS 12 Income taxes | Section 29 | Both use temporary-differences approach; SMEs simpler on deferred tax assessment. |
| IAS 16 PPE | Section 17 | SMEs allow cost or revaluation model (similar). SMEs do not require detailed component depreciation in the same way. |
| IAS 17 / IFRS 16 Leases | Section 20 | Material difference. SMEs retain operating-vs-finance classification for lessees; IFRS 16 puts all leases on the balance sheet (with exemptions). |
| IAS 19 Employee benefits | Section 28 | SMEs simplify the DB plan accounting (more disclosure than detailed actuarial); short-term and termination benefits similar. |
| IAS 20 Government grants | Section 24 | SMEs use the performance model OR the accrual model; election by entity. |
| IAS 21 FX | Section 30 | Substantially aligned. |
| IAS 23 Borrowing costs | Section 25 | Material difference. SMEs expense all borrowing costs; full IFRS capitalises on qualifying assets. |
| IAS 24 Related-party disclosures | Section 33 | Substantially aligned. |
| IAS 27 / 28 Separate FS, associates | Section 9, 14 | SMEs allow cost / equity / fair-value model choices for investments in associates. |
| IAS 29 Hyperinflation | Section 31 | Same restatement principles. |
| IAS 32 / IFRS 9 Financial instruments | Section 11, 12 | Material difference. SMEs use a simpler classification (basic vs other) and an incurred-loss-like impairment model (Section 11 paragraph 21 onwards); IFRS 9 uses ECL across all relevant instruments. |
| IAS 33 EPS | Not required by SMEs | SMEs do not require EPS. |
| IAS 34 Interim reporting | Not required by SMEs | SMEs do not mandate interim reporting; if produced, follow IAS 34 style. |
| IAS 36 Impairment | Section 27 | SMEs simpler. Cash-generating-unit testing only when indicators present; goodwill amortised over useful life (Section 19), so the annual-impairment-only model of IAS 36 does not apply to SME goodwill. |
| IAS 37 Provisions, contingencies | Section 21 | Substantially aligned. |
| IAS 38 Intangibles | Section 18 | Material difference. SMEs expense all internally generated intangibles (no capitalisable development costs). |
| IAS 40 Investment property | Section 16 | SMEs measure investment property at fair value through P&L if measurable without undue cost or effort; otherwise treat as PPE. |
| IAS 41 Agriculture | Section 34 | Substantially aligned. Fair value less costs to sell where reliably measurable; otherwise cost. |
| IFRS 3 Business combinations | Section 19 | Material difference. SMEs amortise goodwill (max 10 years if life uncertain); full IFRS does not amortise (impairment only). |
| IFRS 5 Held for sale | Section 17.27 onwards | SMEs do not have a separate IFRS-5-style classification; impairment indicator approach instead. |
| IFRS 7 / 9 Disclosures | Section 11.39 onwards | SMEs require fewer financial-instrument disclosures. |
| IFRS 8 Segments | Not required by SMEs | SMEs do not mandate segment reporting. |
| IFRS 10, 11, 12 Consolidation, JVs | Section 9, 15 | SMEs offer cost / equity / fair-value model choices. |
| IFRS 13 Fair value | Section 11 paragraphs on fair value | SMEs simpler; less explicit hierarchy disclosure. |
| IFRS 15 Revenue | Section 23 | Material difference for complex contracts. SMEs use risks-and-rewards / stage of completion; IFRS 15 uses five-step. Outcome converges for simple sales. |
| IFRS 16 Leases | Section 20 | See IAS 17 row. |
| IFRS 17 Insurance contracts | Not in SMEs | Out of scope for typical Chwezi clients. |
Practical guidance per client type
| Client | Recommended framework |
|---|---|
| Small retail / hospitality / family business | IFRS for SMEs. |
| Schools, clinics (small / mid private) | IFRS for SMEs. |
| NGOs (small / mid donor-funded) | IFRS for SMEs unless donor mandates full IFRS. |
| Agribusiness (SME) | IFRS for SMEs. Section 34 Agriculture central — see ias-agriculture. |
| Manufacturing (SME) | IFRS for SMEs. Section 13 inventory cost-flow critical. |
| Mid-large private group | IFRS for SMEs or full IFRS depending on group reporting and bank covenants. |
| Listed entities or those preparing to list | Full IFRS. |
| Banking, insurance, pensions | Full IFRS (regulated). |
Build implications
- Framework is a per-entity attribute; rules engine selects the correct sections at runtime.
- Inventory engine: FIFO / weighted average enabled; LIFO blocked in both.
- Lease engine: Section 20 model under IFRS for SMEs; IFRS 16 model under full IFRS.
- Financial instruments: Section 11 model under IFRS for SMEs; IFRS 9 ECL under full IFRS.
- Goodwill: amortised under IFRS for SMEs (Section 19); impairment-only under full IFRS.
- Borrowing costs: expensed under IFRS for SMEs; capitalised under IAS 23 where qualifying.
- Investment property: Section 16 election under IFRS for SMEs; IAS 40 choice under full IFRS.
Forbidden patterns
- Mixing frameworks within a single entity-period without policy-change documentation (blocker).
- Applying IFRS 16 lessee accounting to an SME book without explicit selection of full IFRS (blocker).
- Capitalising development costs under IFRS for SMEs (blocker).
- Capitalising borrowing costs under IFRS for SMEs (blocker).
Files
SKILL.md.references/full-ifrs-to-sme-mapping.md— full cross-reference with paragraph numbers.references/client-profile-decision-tree.md— flowchart for framework selection.
Last reviewed: 2026-05-12. Next review due: 2026-11-12.