SMEs

Definition of an SME in Kenya

An SME is defined as an entity that,

a) Does not have public accountability
b) Publishes general purpose financial statements for external users eg owners not involved in day to day management; Kenya Revenue Authority; existing and potential creditors; credit rating agencies.
c) Who’s debt and equity instruments are NOT traded in the public market (A domestic or foreign stock exchange or over the counter market)

AND

d) Does NOT hold funds in a fiduciary capacity for a broad group of outsiders as one of its primary businesses such as banks, credit unions, insurance companies, securities brokers/dealers, mutual funds and investment banks

SMEs will have the option to use IFRSs for SMEs or the full IFRSs

 

Non SMEs are Publicly Accountable entities that,

a) Have their debt and equity instruments traded in the public market (A domestic or foreign stock exchange or over the counter market)

AND/OR

b) Hold funds in a fiduciary capacity for a broad group of outsiders as one of its primary businesses such as banks, credit unions/Saccos, insurance companies, securities brokers/dealers, mutual funds and investment banks

Publicly accountable entities must present their financial statements in compliance with full IFRS. These (Publicly accountable entities) will comprise entities included in the list below,

a) Companies whose debt or equity instruments are traded in a public market or are in the process of issuing such instruments for trading in a public market
b) Banks and Building Societies
c) Savings and Credit unions including Saccos
d) Insurance companies
e) Retirement Benefit Schemes
f) State owned entities including state funded parastatals
g) Mutual funds
h) Investment banks
i) Stock brokers

All other entities (Not in this list) preparing general purpose financial statements for external users may opt whether to comply with full IFRS or the IFRS for SMEs

Note: Council will continue to monitor adoption of the new standard and will issue further guidance as may be appropriate.

 
Member of IFAC World Congress of Accountants - 2014

Contacts

P.O BOX 59963-00200, CPA Center, Ruaraka , Thika road. Nairobi, Kenya.

Tel: +254 (0) 20 2304226,2304227

Mobile: +254 (0) 727 531006 / 733 856262 / 721 469796/ 721469169

Email:  icpak@icpak.com