The moment you enter into a contract involving money, whether it’s a loan, a sale on credit, or an interest-free advance, you need to recognise it in your accounting records. Section 11 of the IFRS for SMEs tells you exactly when and how to do this. In this article, we explain the rules for initial recognition and measurement of financial instruments in simple terms. You’ll learn how to record trade receivables, loans, and financing transactions correctly, and how to apply present value when needed. With practical examples and clear guidance, this article helps you get the basics right from day one.

The statement of financial position shows what a business owns, what it owes, and what is left for the owners. It helps businesses understand their financial health at a specific point in time. Section 4 of the IFRS for SMEs explains how to present this information clearly. By following these guidelines, businesses can organise their assets, liabilities, and equity in a way that makes sense. This ensures financial reports are accurate and useful for decision-making

Annual financial statements help businesses understand their financial health. They show what a company owns, what it owes, how much profit it makes, and where its cash goes. IFRS for SMEs makes these reports simpler for small businesses. Knowing how to read them can help with better decision-making and financial planning. Read the full article to learn more about each statement and why they matter.