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ZICA adopts three-tier financial reporting frameworks

ZICA adopts three-tier financial reporting frameworks
By Kabanda Chulu in Kitwe
Fri 01 July 2011, 04:00 CAT

ZICA has adopted a moderate three-tier financial reporting frameworks to enable SMEs apply accounting standards suitable to meet their needs and capabilities. It is understood that the use of full International Financial Reporting Standards (IFRS) by all entities posed a lot of challenges to small medium enterprises (SMEs) because they are huge in terms of disclosures required and their high rate of revisions.

During the IFRS for SMEs workshop in Kitwe, Zambia Institute of Chartered Accountants (ZICA) chief executive officer Hapenga Kabeta said requirements under the three tier financial reporting framework would entail listed or public interest entities to apply full IFRS. He said economically significant entities (turnover above K20 billion) would apply IFRS for SMEs while small entities (turnover less than K20 billion) would apply the Zambian financial standard for SMEs.

He explained that ZICA in 2005 adopted the use of IFRS without modifications for all entities regardless of their size in Zambia.

“Full IFRS was designed for entities whose securities were traded on the stock exchange and those with public interest hence the use of full IFRS by all entities poses challenges to SMEs not only in Zambia but across the globe, hence ZICA has made a decision to develop a local standard for micro entities which we envisage will reduce the reporting burden on SMEs,” said Kabeta, in a speech read by ZICA director of standards and regulation Chansa Chiteba.

Labels: SMEs, ZICA

posted by MrK @ 5:10 PM