Financial Reporting Harmonization of Small and Medium-sized Enterprises: United Nations Project[Harmonizace účetního výkaznictví malých a středních podniků: projekt Spojených národů]

In 2000, the Intergovernmental Working Group of Experts (of United Nation's ISAR section) identified a number of obstacles that small and medium-sized enterprises (SMEs) are facing in application of accounting standards that had been issued by various standard-setting bodies, both national and international. It was agreed to start activity on project that would meet the accounting and financial reporting needs of such group of enterprises and their users - so called project ISAR SMEs. The research verified that three-tiered structure is the best for satisfying these needs. The enterprises of level 1 have public accountancy and thence apply full IFRS. Enterprises not related to significant public interest fall into the level 2; they therefore apply shorter IFRS, but they have the option to follow the full set of IFRS. The smallest entities belong into level 3; they apply simple accrual-based accounting also based on IFRS principles, but closely linked to cash transactions. These three levels would be determined by each State that chooses to apply this approach, taking into account the prevailing economic, legal and social circumstances. The project is pitched especially to developing countries and countries with economies in transition, in which there is no satisfactory developed market environment as the prerequisite of successful application of more exigent standards.