By Gavin Davids
Firm says IFRS introduction would help unify and streamline financial reporting for small businesses.
Grant Thornton, a leading independently owned accounting and consulting firm, has backed the introduction of International Financial Reporting Standards (IFRS) for small and medium sized enterprises.
The firm said that the introduction of IFRS would help unify and streamline financial reporting for small businesses, while facilitating the further growth of the SME sector in the UAE.
Raza Meghji, partner, Grant Thornton UAE, said that as the sector currently accounted for more than 85 percent of all business in the UAE, it represented the primary driver of job creation and growth in the country.
Meghji highlighted the biggest challenge faced by small and medium enterprises, the access to finance, which was exacerbated by the global financial crisis.
He added: “By adopting IFRS for SMEs, small businesses in the UAE will be able to provide potential lenders and investors with credible, standardised and transparent financial records, facilitating the extension of credit and benefiting the long term diversification and stability of the domestic economy.”
Since 2007, Abu Dhabi’s Sheikh Khalifa Fund for Support and Development of Small and Medium Enterprises has helped finance 205 projects worth approximately $92.5 million. In January, it approved an additional $30.2 million in funds for 67 new small to medium sized enterprises.
Meghji added that with the announcement of the SME Development Roadmap by the Mohammed Bin Rashid Establishment for SME Development in December 2009 and the definition for SMEs now in place, the new IFRS for SMEs provide clear benefits for investors, lenders and those seeking to raise finance.