Auditing firm KPMG in Jamaica has announced the availability of an alternative International Financial Reporting Standards (IFRS) for small and medium-sized businesses(SMEs).

“We have IFRS for SMEs so smaller companies can use a set of standards that are less rigorous and not as demanding as full-blown IFRS for these companies. So smaller companies, privately owned companies, they can adopt IFRS for SMEs and it will be less rigorous. It’s easier for them, so that’s an alternative to full IFRS,” Wilbert Spence, audit partner and head of Corporate Citizenship at KPMG in Jamaica declared.

The IFRS provides a common global language for business affairs so that company accounts are understandable and comparable across international boundaries. IFRS was developed by the International Accounting Standards Board (IASB), an independent, non-profit organisation.

“Back in July 1, 2012, Jamaica adopted IFRS, and the whole point is that we wanted to be in compliance with what is happening globally because IFRS is a global standard; we didn’t want to have a separate standard for Jamaica. If somebody takes up a financial statement in Jamaica and compares it to a company in the UK or elsewhere in the world, then there should be consistency right across the world in terms of looking at financial statements. So the importance of us in Jamaica is to ensure that we adopt to these changes, is to ensure that we have consistency right across that world,” Spence explained.

He noted that a major drawback for companies not conforming to IFRS is that “then as auditors we will have to qualify their finance statements”.

“The Institute of Chartered Accountants of Jamaica has accepted IFRS — it means that IFRS is entrenched in the legal framework in Jamaica,” Spence argued.

He said, however, that one disadvantage of adherance to the IFRS system is the accompanying cost.

“What it has also done is that computer systems, in some cases, you have to amend them to facilitate, for instance, IFRS 9 in terms of the expected credit loss (ECL) model. It is costly because companies do have to spend money so that they comply with the requirements of IFRS 9, in particular. And I suspect IFRS 16, the leases will require some additional cost on the part of companies in terms of complying with these standards,” Spence said.

He was speaking to the Jamaica Observer during the KPMG in Jamaica Annual IFRS Update Seminar, at the Iberostar hotel in St James, recently.

Richard Peters, group financial director at itelbpo, was among several participants who gave KPMG the thumbs up for hosting the seminar, which they cited as informative.

“I am a non-Jamaican. I have been here for 12 years, this is my fourth job. Three of those four companies, and I am talking about big companies, have KPMG as their auditors so there must be something to it. The seminars are on point; it’s relevant,” Peters said.

Julian Palmer, chief financial officer for MBJ Airports Limited, was also impressed.

“ I choose KPMG seminars because I have been to previous seminars that they have and so far, one of the things I like about it is they provide an excellent presenter that explains the technical accounting standards in a very practical way which is easy to understand that I can take away from the presentation and go back to my company to implement the standards,” Palmer said.

Paul Campbell, chief financial officer of the Tryall Club, was equally impressed with the presentations at the seminar.